Huatai A-share strategy: "Spring restlessness" in progress, subsequent aesthetics may return to the trend.

Huatai released a research report stating that last week, the market fell on high volume and then rose on low volume, with the index running below the high-density chip range. The oversold rebound in February resonated with the "spring excitement," and the market intensity exceeded expectations. The broad-based rebound may have already reached its peak, while the "spring excitement" is still unfolding. With the upcoming "Two Sessions," historical market characteristics show that there is often a reversal during the session, with the trend continuing after the session. The key themes during the sessions may correspond to investment opportunities, focusing on new productive forces, technological innovation, industrial strength, and green development. Huatai's main points are as follows: Oversold rebound, delayed "spring excitement" Since the index's low point on February 5, this round of oversold rebound, mainly focused on the ChiNext and TMT sectors, has gone through four stages: a pre-holiday "red envelope" market from February 6 to 8, a low-volume rise from February 19 to 23, a high-volume decline from February 26 to 28, and a low-volume rise from February 29 to March 1. Regarding this rebound, the intensity is higher than expected, driven by the resonance between the "oversold rebound" and "spring excitement." The market has entered a high-density chip range. While the broad-based rebound may have reached its peak, the "spring excitement" is still ongoing. Policy catalysts in trading need to focus on profit-taking after expectation realization, gradually shifting focus back to the economy. Reviewing the market during the "Two Sessions": Focus on the short-term market trend after the session and the themes related to the "keywords." Reviewing the market during the "Two Sessions" since 2014, four findings have been observed: the probability of a reversal during the session is high compared to the 20 trading days before the session, historically the index tends to continue its trend after the session. The industry trend during the session usually does not shift significantly, with strong industries before and after the session overlapping. Paying attention to the keywords during the session can signal future themes. Looking ahead to the 2024 "Two Sessions": Focus on how new productive forces can continue to innovate. Investors are watching for growth targets, fiscal measures, stimulating domestic demand, and industrial policies. Growth targets are expected to be around 5%. Fiscal expansion may be moderate, with potential issuance of around 1 trillion yuan in refinancing bonds. Promoting new productive forces includes focusing on technology innovation, industrial strength, and green development. In terms of investment, it is recommended to continue to focus on the Shanghai and Shenzhen 300 index and explore opportunities in deep-value sectors. In the medium term, dividend stocks remain a key direction, but investors should wait for buying opportunities and consider the economic landscape. It is also recommended to explore deep-value sectors such as biological products and healthcare services. Risks include lower-than-expected domestic economic performance and tighter-than-expected overseas liquidity.