Technical Breakthrough of the Shanghai Composite Index at 4000 Points and Market Prospect Analysis

On November 13, 2025, the technical analysis views published on the Xueqiu platform suggested that the 4000-point mark of the Shanghai Composite Index is an effective breakthrough of the 18-year large triangular consolidation pattern, not the end of the current bull market [0]. This view has been partially verified by market data: on that day, the Shanghai Composite Index closed up 0.73% to 4029 points, hitting a new high in over a decade, the ChiNext Index surged over 2.5%, and more than 3900 stocks across the market closed higher [1].

However, the latest market data shows that as of November 14, the Shanghai Composite Index closed at 3990.49 points, down 0.97% from the previous day, indicating that the market has experienced some technical adjustments near the 4000-point mark [0].

Compared with the two 4000-point breakthroughs in 2007 and 2015, the current market shows significant differences. Nord Fund analysis points out that behind this 4000-point breakthrough are completely different market ecology, industrial structure, and investment logic [2]. The specific manifestations are:

• Industrial Structure Change
  : The proportion of the technology sector has increased significantly, and the new economy has become the dominant force [2]
• Optimization of Investor Structure
  : The proportion of institutional investors has increased, making the market more rational [1]
• Improvement of Regulatory Environment
  : The basic market system is more complete, and investor protection mechanisms are more sound [2]

Incremental capital has performed strongly, providing strong support for the market breakthrough:

• The number of newly opened stock accounts this year has exceeded 25 million, and many newly launched funds have experienced the “daylight fund” phenomenon, indicating that the process of residents’ savings shifting to the capital market has started this year [1]
• The balance of margin trading and securities lending in Shanghai, Shenzhen, and Beijing has climbed to 2.5 trillion yuan, and the risk appetite of leveraged funds continues to rise [3]
• Since November, northbound funds have accumulated a net inflow of over 20 billion yuan, forming a resonance pattern between domestic and foreign capital [3]

However, it should be noted that the average turnover this week was 2.01 trillion yuan, a decrease from last week’s 2.33 trillion yuan, indicating that funds did not accelerate their entry near the 4000-point level [4].

The current market trend has strong policy driving force. Li Ming, Vice Chairman of the China Securities Regulatory Commission, stated at the International Investors Conference: “China’s economy has a stable foundation, many advantages, strong resilience, and great potential; the supporting conditions and basic trends for long-term improvement have not changed” [3]. The People’s Bank of China’s October financial data shows that the year-on-year growth rates of broad money (M2) and social financing scale have remained at high levels, continuously creating a suitable monetary and financial environment for the economic recovery and improvement [5].

The technical aspects and macro fundamentals have resonated, indicating that a new round of super bull market cycle may have started. Yang Delong, Chief Economist of Qianhai Open Source Fund, believes that the current A-share market is at a key node where the first half of the bull market ends and the second half begins; the 4000-point level is not the end of the market trend but may be the starting point of a new round of market trend [1].

The analysis points out that this round of market trend aims to serve national strategic transformation and wealth management needs, highlighting the value of core asset allocation [0]. This is highly consistent with the current direction of economic transformation, and the rise of the new economy sector provides a new growth engine for the market.

Investors should pay attention to the following risk factors:

1. Technical Correction Risk
   : There is great pressure from historical locked-up chips above the 4000-point level. Some analysts point out that if there is a continuous lack of volume, it may trigger a technical pullback [3]. Historical data shows that the Shanghai Composite Index broke through the 4000-point level upward on May 9, 2007, and April 9, 2015, but the market background and structure of each breakthrough are significantly different [2].

2. Valuation Level Risk
   : The valuations of some popular sectors are already at historical highs, with correction pressure [4].

3. External Environment Uncertainty
   : External factors such as geopolitical risks and international trade frictions may affect market sentiment [5].

4. Diminishing Marginal Effect of Policies
   : As policy dividends are gradually released, the effect of subsequent policy stimuli may diminish marginally [1].

1. Trend of Residents’ Wealth Transfer
   : The surge in new accounts and the “daylight fund” phenomenon indicate that the general trend of residents’ wealth shifting to the capital market has just started [1].

2. Acceleration of Institutionalization Process
   : The optimization of investor structure lays the foundation for the long-term healthy development of the market [2].

3. Dominant Position of New Economy
   : The increase in the proportion of the technology sector provides sustained growth momentum for the market [2].

• Turnover Changes
  : Focus on whether it can return to a volume level of more than 2.3 trillion yuan [4]
• Northbound Fund Flow
  : The important impact of foreign capital inflow and outflow trends on market sentiment [3]
• Corporate Performance
  : The upcoming performance verification period for annual reports and first-quarter reports [1]
• Policy Implementation Effect
  : The actual implementation effect of various stable growth policies [5]

Based on comprehensive analysis, the view that the 4000-point level of the Shanghai Composite Index is a breakthrough of the 18-year large triangular consolidation pattern has certain technical rationality, especially against the background of current policy-driven and relatively abundant capital. The structural changes in market ecology provide a different foundation from history for the new round of market trends.

However, investors need to realize that breakthroughs at important levels often require repeated confirmation. The current adjustment of the market near the 4000-point level is a normal technical phenomenon. Historical laws indicate that sustained volume is a key factor in confirming the effectiveness of the breakthrough [4].

From the perspective of investment strategy, it is recommended to pay attention to the value of core asset allocation while maintaining moderate caution, and adopt strategies such as phased layout and position control to cope with market fluctuations. Focus on whether corporate profit growth can keep up with the pace of index rises and the sustained release effect of policy dividends.