Hexun Investment Advisor Feng Lushun: What's next for the chemical industry?

On February 28th, Feng Lushun from Hexun Investment Advisory stated that the chemical sector is showing a pattern of decreasing volume while reaching new highs. It is necessary to analyze the future trend more deeply based on the relationship between volume and price. Currently, during the upward movement, although the stock price is hitting new highs, the trading volume has not effectively followed, forming an initial divergence between volume and price. However, it should be noted that divergence between volume and price needs to be confirmed by a volume spike with a downward candle (such as a day with extremely high volume and high price). Until then, it is only considered a temporary disagreement during the rise. Looking at historical cases, the chemical sector previously experienced a volume divergence followed by a large-volume downward candle that triggered a correction. Caution is advised for similar risks this time. From a technical perspective, after a large cycle retracement to the 5-week moving average and stabilization, the short-term chart shows support at the 5-day moving average, with a golden cross of the 10-day moving average and MACD turning red. The monthly chart is also about to retest the 5-month moving average, maintaining an overall upward pattern. In terms of trading strategy, before the index moving averages form a death cross, it is advisable to continue monitoring the chemical sector, but focus on select sub-sectors. Key areas include those with rising prices (such as current photoresists, phosphorus chemicals, sulfur herbicides, etc.) and stocks with multiple moving average bullish arrangements (5-day golden cross 10-day, price above moving averages), MACD turning red, and hitting daily limit-ups (indicating strong institutional support). Avoid blindly chasing high.