The adjustment is still ongoing, but the room for further decline is really limited.

Last week, after the market surged, it pulled back again. The issues lie in two areas—one is some artificial factors at play, and the other is that the technical aspect itself needs a rest. The underlying logic is to guide the market toward a "steady rise" rather than a frantic surge; we can only follow the rhythm.

From a weekly chart perspective, the bullish pattern is still intact, and the moving average alignment remains bullish. The weekly K-line just retested the breakout level; as long as it holds above 4034, there’s no problem. The upward-shifting 5-week moving average next week will provide short-term support.

At the daily level, the correction starting from 4190 has already formed a small to medium-term intraday central pivot. If the index probes lower to new lows, as long as there are no signs of accelerated decline, it will be a standard abc correction structure; if the c wave is weaker than the a wave, the conditions for a rebound will emerge.

Therefore, even if the index tests lower next week, there’s no need to panic. As long as the downward momentum hasn’t intensified, it’s possible to consider buying on dips. However, there is also a stronger scenario: if the index breaks above and stabilizes above the 5-day moving average, it could attempt to retest the previous high at 4190. Both situations require pre-planning responses.

On the sector side, last week’s AI applications and commercial aerospace sectors continued to cool down due to "artificial cooling." Next week, a technical rebound is highly likely. But note that such rebounds after breaking intraday lows often confirm the trend; whether the correction has truly ended depends on how the neckline pressure performs. The operational principle is simple—favor the strong over the weak, prioritizing targets with strong resilience and no technical breakdowns.

From a longer-term perspective, the stories of AI applications and commercial aerospace are far from over; 2026 will still be a key focus for the market. The valuation and investment potential in semiconductors and related sub-sectors are also very clear.