Market Outlook - The A-share market is expected to experience a low-volatility trend with a long-term decline in market volatility [2] - The upward trend in the stock market is not yet over, indicating further potential for growth [2] - A-shares are anticipated to maintain a fluctuating upward trend, with the importance of fundamentals increasing after a valuation adjustment [2][3] Capital Flow - The demand for asset allocation among domestic residents has been activated by profit effects, with various medium- to long-term funds entering the market, suggesting an active capital flow in 2026 [2][3] - Incremental capital is expected to cover a broader range, driven by increasing motivation among individual investors to enter the market [3] - Public funds and insurance capital are likely to continue increasing their allocation to equity assets, reshaping global capital flow logic [4] Key Investment Sectors - Key sectors to focus on include: - Non-ferrous metals, chemicals, and new energy [2] - Technology growth, manufacturing expansion, cyclical consumption transformation, and U.S. stocks [2] - New energy, non-ferrous metals, basic chemicals, oil and petrochemicals, non-bank financials, military industry, and machinery [3] - AI, new energy, military industry, innovative pharmaceuticals, price increase chains, and overseas expansion chains [4] - Technology innovation themes and consumption sectors [4] - TMT and advanced manufacturing sectors, with potential shifts towards cyclical and financial sectors [4]

Group 1 - The market is currently testing key support levels, with the lower boundary around 3374-3347, indicating a potential end to the current adjustment phase if it can reclaim the 3400 level [3] - The early trading session showed a lack of direction, with a general decline in individual stocks, suggesting uncertainty among major players [3] - The critical resistance levels for the market are identified as 3393-3415, and a failure to hold above 3355-3347 could lead to further declines [3] Group 2 - The daily life line is positioned around 3385, and the market needs to stay above this level to maintain a bullish outlook [4] - The key trading ranges for the market are set between 3384-3343, with a strong performance expected only if it remains above the upper boundary [4] - The mid to long-term outlook indicates that maintaining levels above 60-day and 250-day moving averages is essential to avoid a return to a bearish market [4]