Huaxi Securities deputy GM and head of research Wei Tao said on July 22 the
recent pullback is a healthy technical repair after rapid gains. Since April
2026 the tech complex led strong rallies and some sectors saw sharp valuation
expansion, creating an objective need for re‑rating and position transfer.
Recent adjustments have digested prior profit taking and released some
short‑term irrational selling. Rebound conditions are gradually maturing: broad
indices’ valuations have fallen to relative year lows, improving margins of
safety; leverage risk has been reduced as margin‑financing balances have
declined materially; mainstream broad ETFs have attracted cash at low levels,
signaling greater long‑term fund acceptance of current prices. Falling crowding
and a more balanced trading structure have opened technical space for a rebound.
