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Three Critical Factors That Will Determine the Market’s Next Move
The SSE Composite’s four-day winning streak has brought it within striking distance of the psychologically important 3,400 level, but Friday’s tepid ¥452.7 billion turnover and sector divergence suggest the breakthrough attempt may require stronger catalysts in the coming week.
Today’s Market Snapshot
| Index | Change | Key Observation |
|---|---|---|
| SSE Composite | +0.04% (3,385.36) | Failed test of 3,391 resistance |
| SZSE Component | -0.19% (10,183.70) | Tech weakness persists |
| Turnover | ¥1.15T (-10.7% YoY) | Below breakout threshold |
Sector Performance
Leading Sectors
- Precious Metals (+2.3%)
- Industrial Metals (+1.8%)
- Agricultural Chemicals (+1.5%)
- 5G Infrastructure (+1.2%)
Lagging Sectors
- Brokerages (-1.4%)
- Consumer Staples (-1.1%)
- Healthcare Services (-0.9%)
- Gaming (-0.7%)
Technical Perspective
- Short-term:
- 5-day MA support holding at 3,370
- RSI at 58 (neutral territory)
- Key Resistance:
- 3,391 (June 6 high)
- 3,400 psychological barrier
- 3,417 (year-to-date peak)
- Volume Requirement: ¥750B+ for sustainable breakout
Breakthrough Prerequisites
| Factor | Current Status | Threshold for Breakout |
|---|---|---|
| Policy Support | Neutral | Market-recognized stimulus |
| Brokerage Sector | Underperforming (-1.4%) | Sustained leadership |
| Trading Volume | ¥452.7B (SSE) | ¥750B+ sustained |
Historical Context
The 3,400 level has served as both support and resistance in 2024:
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- April: Rejected twice before breakthrough
- May: Held as support for 7 sessions
- Current: 4th test this quarter
Strategic Recommendation
- Conservative Traders: Wait for confirmed close above 3,400 with volume
- Active Traders:
- Buy pullbacks to 3,370 support
- Reduce exposure at 3,390-3,400
- Sector Focus:
- Overweight materials/energy
- Underweight consumer discretionary
The market’s ability to sustain above 3,400 will ultimately depend on whether policy catalysts can emerge to complement the current technical setup, particularly given brokerages’ role as a leading indicator for sustained rallies.
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