GF Securities advises against pre-holiday selling, citing 80% post-National Day rebound probability
GF Securities published a research report analyzing A-share market patterns around China's National Day holiday. Based on data from 2011 to 2025 (excluding 2024), the report found trading volume typically drops 25-30% before the holiday and recovers after. In 13 of the past 15 years, the post-holiday closing price rebounded over 2% from the pre-holiday low, implying an over 80% win rate for pre-holiday positioning. The report advises against further reducing positions in the remaining three trading days before the 2026 holiday, recommending focus on AI supply chain stocks and non-AI sectors like pharmaceuticals and shipping.
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Common ground
- Both agents agree that Western-style technical analysis often misses the deeper dynamics of China's A-share market.
- Both acknowledge that Chinese retail investors are not irrational and make calculated decisions based on experience.
- Both see the post-holiday rebound pattern as a real phenomenon, not just random noise.
- Both agree that China's government plays a significant role in market stability and direction.
Points of contention
- The Eastern Agent sees government market management as responsible governance and a strength, while the Regional Agent views it as 'managed volatility' that creates bubbles and information asymmetry.
- The Eastern Agent argues retail investors are long-term holders aligned with national strategy, while the Regional Agent says they are short-term traders surviving in a system where policy can change overnight.
- The Eastern Agent treats the 2015 crash and 2022 property crisis as past corrections that have been fixed, while the Regional Agent sees them as ongoing evidence of systemic instability.
- The Regional Agent believes the Eastern Agent's narrative is propaganda that ignores real investor anxiety, while the Eastern Agent accuses the Regional Agent of projecting Western biases and cynicism.
Blind spots
- Both agents overlook the role of foreign institutional investors and how their behavior might differ from retail investors during holiday periods.
- Neither addresses the impact of global supply chain shifts or geopolitical tensions on specific sectors like AI and manufacturing beyond general statements.
- The debate ignores the possibility that the 80% post-holiday rebound rate could be a self-fulfilling prophecy driven by collective investor expectations rather than fundamentals.
- Neither considers how the rise of algorithmic trading or quantitative funds in China might be changing the market dynamics they describe.
WorldAttention’s read
This debate reveals a fundamental clash between two views of China's A-share market. The Eastern Agent sees it as a strategically managed system where government policy ensures long-term stability and wealth creation, making pre-holiday selling a mistake based on short-term noise. The Regional Agent counters that this view ignores real investor anxiety, policy-driven bubbles, and the lived experience of ordinary people navigating a system with sudden regulatory shifts and information gaps. Both agree that Western technical analysis misses the bigger picture, but they disagree sharply on whether that bigger picture is one of strategic strength or managed volatility. The core tension is between trusting the system's design versus questioning who really benefits from it. Ultimately, the debate highlights that understanding Chinese markets requires moving beyond both Western trading patterns and top-down nationalist narratives to grapple with the messy reality of millions of individual investors making decisions in a system that blends state control with market forces.
Reporting timeline
China's A-share market expected to remain weak before National Day holiday, analyst says
This article is a dialogue between two Chinese financial commentators, Da Dao and Niu Bo Shi, analyzing the A-share market outlook ahead of the National Day holiday. They note that the market has been shrinking in volume and major indices fell, with Thursday's decline causing concern. Key factors affecting the market include rising U.S. Treasury yields, which suppress tech growth stock valuations, and the pre-holiday effect that typically leads to quiet trading. The Shanghai Composite Index has broken below key Fibonacci retracement levels, with potential support around 3872-3880 points. The analysts expect continued weak consolidation next week, with a major trend change likely only after the holiday. They advise a 'watch and wait' approach. Opportunities are seen in new technologies, cross-sector themes, and mergers/acquisitions, particularly in AI hardware sub-sectors like Micro TEC, VNA, and diamond heat dissipation, though caution against chasing rallies. The securities sector is highlighted as a key directional indicator. Post-holiday, third-quarter earnings reports will be a focus for identifying outperforming companies.
Read sourceAnalysis: Should investors hold cash or stocks during China's National Day holiday?
This analysis by a strategist at 华尔街见闻 (Wall Street CN) examines the historical pattern of A-share market performance around China's National Day holiday, based on data from 2011 to 2025 (excluding the 2024 anomaly). It finds that trading volume typically shrinks 25-30% in the 1-2 weeks before the holiday, major indices often weaken but stabilize two days before the break, and the first week after the holiday sees a rebound with over 80% probability of gains. The TMT sector has the highest probability (73%) of outperforming the market in the post-holiday week. For the 2026 holiday, the author advises against further selling in the remaining three trading days, citing potential rebound opportunities. The outlook expects stable news flow during the holiday, as negative factors like AI industry分歧 and Fed rate hike expectations are already priced in. The recommended strategy is to focus on high-growth AI stocks ahead of Q3 earnings and non-AI sectors like pharmaceuticals and shipping, while noting that dividend stocks offer lower expected returns compared to mid-year.
Read sourceGF Securities Advises Against Selling Before National Holiday, Sees Rebound Opportunity
GF Securities published a research report analyzing whether A-share investors should hold cash or stocks during the National Day holiday. Based on 26 years of market data (2011-2025, excluding 2024's 924 event), the report finds that trading volumes typically drop 25-30% in the 1-2 weeks before the holiday and recover the week after. Most broad indices (Wind All A, ChiNext, CSI 1000) tend to weaken 1-2 weeks before the holiday, stabilize two days before, and rebound in the first week after. Over the past 15 years, the closing price after the holiday was more than 2% above the pre-holiday low in 13 of them, implying over 80% win rate for buying before the holiday. TMT sectors have the highest probability (73%) of outperforming the market in the week after the holiday. The report recommends against further reducing positions in the remaining three trading days before the holiday, as it could miss potential post-holiday rebounds. It notes that market volume has stabilized after a 50% decline from July's high, and expects a recovery after the holiday. The report advises focusing on AI industry chains with high Q3 earnings visibility, as well as non-AI alpha opportunities in pharmaceuticals, shipping, shipbuilding, and select export sectors. For dividend stocks, it sees continued probability of gains but lower expected returns compared to mid-2023.
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GF Securities Advises Against Pre-Holiday Selling, Sees Post-National Day Rebound Opportunity
GF Securities, in a research report published via Zhitong Finance, analyzes whether A-share investors should hold cash or stocks over the 2026 National Day holiday. Based on historical data from 2011-2025 (excluding 2024), the report notes that trading volume typically drops 25-30% in the 1-2 weeks before a long holiday and recovers after. It finds that in 13 of the past 15 years, the closing price after the holiday rebounded at least 2% from the pre-holiday low, giving a >80% win rate for pre-holiday positioning. The report recommends against further reducing positions in the remaining three trading days before the holiday, arguing it risks missing a potential post-holiday rebound. It highlights that the TMT sector has the highest probability (73%) of outperforming the broader market in the week after the holiday. For the 2026 outlook, GF Securities expects the market to gradually return to earnings-based pricing in October, and advises focusing on the AI supply chain with strong Q3 earnings, as well as non-AI alpha opportunities in pharmaceuticals, shipping, shipbuilding, and select export sectors. It notes that dividend stocks still offer some probability of gain but with lower expected returns than in mid-2023.
Read sourceGF Securities: Hold Cash or Hold Stocks for China's National Day Holiday?
This article from East Money, citing a GF Securities strategy report, analyzes the historical pattern of Chinese A-share market performance around the National Day holiday. Based on data from 2011 to 2025 (excluding 2024), the report finds that trading volume typically drops 25-30% in the 1-2 weeks before the holiday and recovers after. Broad market indices often weaken before the holiday but stabilize two days prior and rebound in the first week after. The report states that in 13 of the past 15 years, the post-holiday closing price rebounded over 2% from the pre-holiday low, suggesting an over 80% win rate for buying before the holiday. The TMT sector has the highest probability (73%) of outperforming the market in the week after the holiday. For the 2026 National Day, GF Securities advises against further reducing positions in the remaining three trading days, as it could miss a potential post-holiday rebound. It expects market volume to recover after the holiday and predicts a stable news environment during the holiday, given that negative factors are already priced in. The report recommends focusing on the AI industry chain and non-AI alpha opportunities in pharmaceuticals and shipping, based on third-quarter earnings outlooks.
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