Midday Review: The A-share market continued to rise in the morning, with the Shanghai Composite Index up over 20 points, standing above 3900 points, and the ChiNext soaring by 50 points. Will the rise of A-shares continue in the afternoon? Can the Shanghai Composite Index stabilize above the 20-day moving average?

The Hainan Free Trade Zone surged by 9%, leading the two markets, while concept stocks triggered a wave of limit-up trading. The leading hotspots in the morning included the Hainan Free Trade Zone, Hainan, precious metals, free trade ports, storage chips, national big fund holdings, electronic chemicals, small metals, copper cable high-speed links, and packaging optics. Among them, the Hainan Free Trade Zone and Hainan sector surged by 9%, leading the two markets, with over 20 stocks hitting the limit-up, creating a limit-up frenzy. The significant rise in the Hainan sector is due to the complete closure of the island for the Hainan Free Trade Port, which is a public good news. If you catch it, you catch it; if you miss it, it's best not to chase it, as the stock market often plays out a scenario where good news turns into bad news.

Aside from the Hainan Free Trade Zone, many of the leading hotspots in the morning were technology-related, such as components, electronic chemicals, storage chips, and packaging optics. The strong rise of technology stocks is most likely to drive a substantial increase in the Innovation and Entrepreneurship Index. In the morning, the ChiNext Index and the Sci-Tech Innovation Board Index both increased by more than one point; the ChiNext Index once surged by 60 points, with a rise of over 2%, leading the two markets. According to market information, the substantial rise of the Innovation and Entrepreneurship Index was still driven by the strong surge of blue-chip stocks, such as Zhongji Xuchuang and New Yisheng in the ChiNext, which both climbed over 5%; and SMIC and Huahong Grace in the Sci-Tech Innovation Board also increased by more than four points. These rapidly rising stocks are all blue-chip stocks with a market value exceeding 100 billion. Their significant surges are the driving force supporting the strong rise of the Innovation and Entrepreneurship Index. However, the potential risks remain significant, as these companies have experienced a doubling rise in the past two years, with some stocks becoming tenfold winners. Risks emerge from increases, and such significant rises will inevitably come with the risk of downward adjustments, so I still do not recommend chasing technology stocks that have doubled in price.

The Shanghai Composite Index opened high and climbed above 3900 points, with four consecutive bullish daily candlesticks. From the intraday chart, the Shanghai Composite Index showed a trend of opening high and rising in the morning, with the index once increasing by 30 points during the session, presenting a strong bullish trend with four consecutive daily candlesticks and breaking through 3900 points while standing above the 20-day moving average. The morning trading volume in the Shanghai market was around 500 billion, and it is expected that today’s trading volume in the Shanghai market may exceed 800 billion. Increased trading volume is the foundation for the Shanghai Composite Index to stabilize above the 20-day moving average. This year, the Shanghai Composite Index will once again face the pressure of the 4000-point integer mark. A trading volume of 800 billion can help the Shanghai Composite Index stand above the 20-day moving average but cannot drive the index to surge above 4000 points. Therefore, the Shanghai market in the afternoon still needs to continue to increase trading volume, and a trading volume at the trillion level is needed to ensure the steady rise of the Shanghai Composite Index and even break through 4000 points.