Last trading day of February: Shanghai Composite Index "precisely" closes at this month's new high! What signals does this send?

On February 27, the three major indices showed mixed performance, with the Shanghai Composite Index up 0.39% and the ChiNext Index down 1.04%.

In terms of sectors, rare metal concept stocks surged to hit daily limit-ups, with steel, gas, coal, electricity, and environmental protection stocks leading the gains. Cloud computing, AI applications, and computing power leasing themes remained active. Hardware, semiconductors, and commercial aerospace concept stocks experienced adjustments.

This month, the Shanghai Composite Index rose a total of 1.09%, showing a “narrow-range fluctuation after a surge,” with the monthly line closing with three consecutive positive days. The Shenzhen Component Index increased by 2.04%, while the ChiNext Index declined by 1.08%. In terms of trading volume, “daily turnover exceeding one trillion yuan” has become the norm. Post-Lunar New Year, market activity has remained lively, with the Shanghai and Shenzhen markets’ combined daily turnover surpassing 2 trillion yuan for four consecutive trading days.

The first trading week of the Year of the Horse in the lunar calendar, and also the last trading week of February 2026, is gradually revealing:

The “temperament” of A-shares is indeed different from before the New Year.

Taking the Shanghai Index as an example, over four trading days this week, despite daily fluctuations, the latest closing point reached 4,162.88 points, a new high for the month and the second-highest for the year—just slightly below the 4,165.29 points on January 12.

Recently, we repeatedly mentioned two “macro” indicators: Wind All A and the All A average stock price, both of which hit new phase highs today.

This indicates that in just 11 trading days in February, the market experienced a decline followed by a rally, successfully completing the “transition” task.

What can we expect in March?

It’s clear that the market is entering the “Two Sessions行情” (Two Sessions market). According to midday reports from Xinhua News Agency, on February 27, the Political Bureau of the CPC Central Committee held a meeting to discuss the draft outline of the 14th Five-Year Plan and the government work report.

A research report from PuYin International pointed out that currently, the macro data is in a vacuum period, and policy expectations are heating up around the Two Sessions. The RMB is expected to continue appreciating, with foreign capital inflows, southbound funds, and insurance funds accelerating market entry. The upcoming listing of industry leaders and other positive factors will help strengthen the spring market. Building on last year’s high returns, observing the sustainability of investments in the first quarter of this year is especially important.

It suggests that in the face of market volatility, investors should focus on structural opportunities (mainly AI tech stocks), while also maintaining defensive allocations (dividend value stocks) and benefiting from “anti-involution” stocks, paving the way for future breakthroughs.

However, in practice, due to the rapid rotation of the market recently, retail investors face considerable difficulty in making short-term profits. Take Tianfu Communication, for example, as discussed in “Yizhongtian”:

As shown in the chart below, from the end of January to now, this stock has gained nearly 70%, clearly a strong trend stock. But on daily K-line charts, every big surge is followed by a correction within 1-3 trading days, then the upward trend continues.

For investors eager to chase gains, each “buying at high levels” tests their confidence. Holding from the bottom to now is not easy.

Moreover, Tianfu Communication has been the strongest stock in the CPO sector recently. The sector itself, along with other heavyweight stocks, has experienced more “turbulence” this week.

Some investors might say that CPO is not the “strongest main theme” this week, and the choppy trend is understandable. Let’s look at the nonferrous metals sector, which contributed most to the index’s rise.

Data shows that under the “price increase” logic, the overall small metal sector has experienced “up one day, down one day” fluctuations.

Conversely, sectors like power, which had slightly lower cumulative gains, showed continuous volume and price increases, providing better feedback for chasing highs.

On the news front, besides the recent announcement by the National Energy Administration of the first batch of pilot projects for enhancing new power system construction capabilities, some analyses point to a very solid logic. According to the Daily Economic News, China’s AI call volume has surpassed the US, with four large models ranking in the top five globally. Behind token calls are electricity and computing power. China’s lower electricity prices allow for offshore expansion through token call volume.

Huaxi Securities’ research report believes that the market atmosphere is highly competitive, and future trading volume is key.

“Wind All A reached a previous high and then continued to fluctuate. The loss-making positions at the previous high create resistance to upward movement. Despite the index’s continuous rise, the number of days with gains and the number of limit-ups have decreased daily from Tuesday to Thursday, indicating that market sentiment is not very high. Going forward, if trading volume can increase sufficiently, it will help absorb potential sell-offs, reducing resistance to rising; if volume remains flat or shrinks, the index may continue to fluctuate.”