Market Analysis:
Yesterday, under the lead of iron ore, rebar continued its upward movement, forming a bullish engulfing candlestick on the weekly chart, signaling a potential short-term upward trend.

However, from a technical perspective, iron ore saw increased open interest with shrinking volume, while rebar saw both open interest and volume decrease. In terms of “market volume,” this indicates a lack of sufficient buying power, and the short-term upward potential is limited, suggesting that the market may undergo consolidation or correction.

The rally has been too rapid, with insufficient momentum pushing prices higher. When the market lacks clear direction and exhibits uncertainty, it’s best to adopt a wait-and-see approach.

While the larger cycle remains downward, there are short-term rebounding opportunities. Given the current fundamentals, short positions ahead of the Chinese New Year may not be ideal.

Strategy:
Our current approach is to favor “light short-term long positions.” Here’s how to proceed:

  1. For those who have not yet opened positions, maintain a neutral stance and continue observing.
  2. For those already holding long positions, keep the stop loss at 3240, but avoid adding to positions; instead, continue observing the market.
  3. Avoid opening new short positions at this stage.

I will adjust the strategy based on changes in iron ore market volumes. For now, the best approach is to remain patient and not make major moves.

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