China A-share W&W Indicator - Monthly: The W&W Indicator further signals “Very Bullish” sign for A-share market

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China A-share W&W Indicator - Monthly: The W&W Indicator further signals “Very Bullish” sign for A-share market

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China A-share W&W Indicator - Monthly

The W&W Indicator further signals “Very

Bullish” sign for A-share market

Equity Strategy

Indicator reiterates “very bullish” sign for A-share 19 May 2026

Monthly average of the BofA China A-share Wax & Wane Indicator improved to 29 in May, Equity Strategy

with weekly average also at 29 – firmly in the bullish zone. Daily reading hit 13 (“very China

bullish”) on May 11th, the strongest level since Sep-2024, following another “very bullish”

signal on Apr 16th. Earnings revision is positive, liquidity is ample, fund flow is supportive,

albeit with elevated leverage and positioning and rich valuation. Global markets delivered

mixed returns in the past one month amid lingering geopolitical tensions yet still-strong AI

trades. Within China, Star 50, ChiNext and CSI1000 outperformed while NASDAQ Golden

Dragon, MSCI China and HSCEI lagged. Sentiment is bullish, with strong interest in China’s

tech and industrials. Market is trading in an “A share style”: thematic-driven, fast rotation,

and favoring mid/small caps. Reiterate our view that A-share’s outperformance over H may

continue (see China Conference feedback). Winnie Wu >>

Research Analyst

Leverage: 75%, high. Margin trading as a % of A-share daily turnover edged lower to Merrill Lynch (Hong Kong) +852 3508 3058

9.9% in May-26, but still higher than its long-term average of 9.0%. winnie.wu@bofa.com

Valuation: 84%, high. P/E at 24.3x is above its long-term average of 21.2x. Gina Wu >> Strategist

Positioning: 64%, high. 86.9% of stock mutual funds’ position is currently invested, Merrill+852 3508Lynch8008(Hong Kong)

higher than its long-term average of 84.7%.