A-share midday review | The three major indexes rose slightly, with transaction volume shrinking to nearly 400 billion in half a day. Stocks in the breeding and gaming sectors led the gains.

On August 26th, the A-share market opened low and rebounded, with the three major indexes slightly rising. The half-day trading volume was 1.68 trillion, a decrease of 398.3 billion from the previous trading day. By the midday close, the Shanghai Composite Index rose by 0.11%, the Shenzhen Component Index rose by 0.73%, and the ChiNext Index rose by 0.21%. Huatai believes that with the release of a huge amount of trading volume, market divergences are increasing in the short term. However, the downward adjustment is seen as a cooling-off period for the current market situation, which is beneficial for the development of a slow bull market. Currently, the bull market is still structural, and as investors shift their positive expectations from industries to the entire socio-economic development in the future, the bull market can enter a phase of broad-based growth. On the market front, the hot spots are somewhat chaotic. The gaming sector is strong, with 37 Interactive Entertainment Network Technology Group hitting the limit up; the pork concept continues to rise, with Muyuan Foods nearing the limit up; Huawei concept stocks collectively rising, with Talkweb Information System and others hitting the limit up; the computing power industry chain remains strong, with Zhejiang Dayuan Pumps Industry hitting 7 circuit breakers in 12 days; the chemical industry sector is surging, with Haiyang Technology hitting the limit up; commercial aerospace and satellite internet concepts are active, with China Spacesat2 hitting the limit up. On the downside, chip stocks collectively adjusted, and concepts like rare earth and steel weakened, with major financial, defense, and real estate sectors leading the decline. Looking ahead, EB SECURITIES believes that the logic supporting the stock market's rise has not changed, and the market valuation is currently reasonable and not significantly overbought. In the medium to long term, the market is still expected to continue to rise. Hot sectors: 1. The gaming sector is strong. 37 Interactive Entertainment Network Technology Group hit the limit up, with Shenzhen Bingchuan Network, Giant Network Group, Perfect World, and G-bits Network Technology following suit. 2. Huawei concept stocks are on the rise. Huawei's Ori, Ascending, Hongmeng, and other directions lead the way, with Sichuan Joyou Digital Technologies, Talkweb Information System, Topsec Technologies Group Inc., and others hitting the limit up. 3. The commercial aerospace concept is active. China Spacesat2 continues to rise, Nanjing Toua Hardware&Tools up 20%, and Piesat Information Technology, TRANSCOM, and Shanghai Hugong Electric Group following suit. Institutional views: 1. China Securities Co.,Ltd.: Market funds sentiment continues to rise, do not ignore the phase of vulnerability risks China Securities Co.,Ltd. believes that the market funds sentiment continues to rise. Although the slope is not steep, it may still provide a certain market interpretation space. However, some indicators have risen to a high level. If the slow bull market evolves into an accelerated peak, the possible phase of vulnerability risks should not be ignored. Overall, there are no significant negative factors in terms of internal and external fundamentals and liquidity conditions. Market sentiment and fund situation have not reached a significantly overheated level. Currently, it is not yet the time to be bearish, and the market trend may continue in the medium-term slow bull market pattern. In the current market situation, sector rotation is still the most significant characteristic of the market. Considering the win rate and odds, it is more cost-effective to find new low positions in the prosperous sectors or focus on them in the short term. Industries to focus on: communication, computers, semiconductors, media, new consumption, new energy, non-banking, and non-ferrous metals, among others. 2. CITIC SEC: This round of the market is not driven by retail investors, continue to focus on resources, innovative drugs, gaming, and defense CITIC SEC believes that looking at various fund situations, the main initiators and promoters of this round of the market up to now are not retail investors; in fact, the core clues of this round of market movements from the start to the acceleration are around industry trends and performance. Since smart money dominates the market, we shouldn't be obsessed with comparing the trends of the past. With the overall products of 2020-2021 entering the break-even zone, the market will experience a process of the handover of old and new funds in the future. The continuation of the future market requires new allocation clues, not just focusing on "money" and liquidity. In terms of allocation, it is suggested to continue focusing on resources, innovative drugs, gaming, and defense, start paying attention to the chemical industry, gradually increase the allocation of some "anti-inward strangle+going abroad" varieties, and the consumer electronics sector in September is also worth paying attention to. 3. Orient: The Shanghai Composite Index faces significant pressure at 3900-4000 points, and the market is likely to experience wide fluctuations Orient believes that the initiators and promoters of this round of market movements are not retail investors, and the core hot sectors are around industry trends and performance. However, the development of new quality productivity and grand narratives is still ongoing, and since institutional smart money dominates, it is believed that the market will not end easily. However, the probability of the stock index reaching a temporary high point this week is higher. The Shanghai Composite Index faces significant pressure at 3900-4000 points, and the market is likely to experience wide fluctuations. In the short term, most of the recent surge in technology-themed stocks have experienced highs and lows intraday, with cyclical stocks gradually becoming active, and clear signs of high and low changes. Investors need to pay attention to similar shifts in market hot spots.