**Morning Review**

This morning, the three major indices all experienced a pullback. By the close, the Shanghai Composite Index dipped slightly by 0.07%, the Shenzhen Component Index fell by 0.67%, and the ChiNext Index declined by 1.1%. From the market data, there were 2,187 stocks advancing and 3,049 stocks declining. In terms of trading volume, the combined turnover of the three markets reached 1.33 trillion yuan, slightly higher than the previous trading day, an increase of 209 million yuan.

It is worth noting that after 10 consecutive days of gains, the Shanghai Composite Index showed a clear pattern of rising sharply and then pulling back today.

**Why is there a correction?**

First, the Hong Kong stock market has been weak these past two days, with the Hang Seng Index down 1.05% as of 11:41 AM. The weakness in Hong Kong stocks has somewhat suppressed market sentiment in A-shares. Second, from a technical perspective, the Shanghai Composite Index has formed a strong short-term upward trend after 10 consecutive days of gains, which naturally attracts some profit-taking. In this context, a decline with a bearish candle is a normal rhythm, and can even be considered a healthy correction.

**Where is the short-term support?**

If the market continues to weaken, the most likely support level for the Shanghai Composite Index is around 3,936 points. This level not only corresponds to the neckline of a double bottom pattern but also coincides with the support of the 10-day moving average. From the current position, there is still some room before reaching this strong support, so the market is not in a very dangerous situation.

**The key lies in the nature of the bearish candle**

If today ends with a bearish candle, how should we interpret it? This depends on what type of bearish candle it is—

One possibility is a mild bearish candle, meaning a small decline without a clear break below support. Such a correction is often temporary, and the market can quickly resume its upward momentum.

Another possibility is a more decisive correction, such as the index dropping directly to around 3,900 points. Although this deep correction may look alarming, it can actually facilitate a quick rebound due to sufficient adjustment, and is not necessarily a bad sign.

The most concerning type is the intermediate one—an indecisive, moderate bearish candle that stalls in the middle. This could lead to more volatility in subsequent movements.

**Trading strategy**

Today, as the last trading day of 2025, there may still be surprises in the market. From a technical standpoint, it’s not impossible for the Shanghai Composite Index to continue its 11-day rally. However, regardless of the direction, the current core approach is to observe patiently, wait for the appearance and confirmation of this bearish candle, and then judge the future trend based on its nature.

By the way, the commercial aerospace sector performed well in the morning session today. Although this sector has already hit new highs, there are still some opportunities within it worth tracking from a technical perspective.