Hexun Investment Advisor Feng Lushun: On March 24, where will the chemical sector go next?

On March 24th, let’s analyze the trend of the chemical sector. Today, the chemical sector hit a new low and rebounded, with a relatively strong rebound. Will it continue to rise tomorrow? We analyze this through volume-price relationships.

First, the chemical sector has been adjusting for some time, with a relatively large correction space. It just retested the 5-month moving average. Previously, it dropped from near the 5-month line, indicating significant selling pressure from major funds at this level. After volume increased and released, resistance formed above. The key now is to focus on the support role of the 5-month line. Today, after hitting the 5-month line and finding support, it began to rebound. During the subsequent rebound, attention should be paid to resistance levels.

In this wave of decline, resistance levels can be viewed in two steps: first, the 5-day moving average; second, looking for large-bodied bearish candles during the decline. Today, a new low rebound has formed, constituting a standard bottom-dividing pattern. Therefore, tomorrow’s movement is crucial—an upward attack candlestick must appear. Only with an attacking bullish candle can the market continue upward. If such a bullish candle fails to appear, the index will likely continue to retest the 5-month and October moving averages, further building a bottom.

Tomorrow, focus on whether an attacking bullish candle can appear, whether its strength is sufficient, and whether it can break above the 5-day moving average. If it cannot break above the 5-day moving average, the market will probably continue to retest lower levels.

(Author: Zhang Yan)

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