Wall Street veterans are adamantly bullish on the Chinese stock market and expect the Shanghai and Shenzhen 300 to rise 50% in a year

Jeff DeGraaf (Jeff DeGraaf), co-founder and CEO of Renaissance Macro Research (Renaissance Macro Research), believes that hedge funds that sold Chinese stocks after the Shanghai and Shenzhen 300 Index surged 35% in 10 days earlier this week will definitely regret it.

De Graaf said, in fact, in his 30-year career on Wall Street, he has rarely seen this kind of perfection heralds a long rebound in the market. In an interview, he said that “skepticism, undervaluation, policy incentives, momentum and trend changes,” all of these conditions are in place, heralding the advent of a long-term bull market.

It is in this context that DeGraaf is now one of Wall Street's most optimistic people about China. He predicts that in the next 12 months, China's benchmark index (Shanghai and Shenzhen 300 Index) will reach 6,000 points, an increase of more than 50%.

In the “Institutional Investor” (Institutional Investor) annual survey up to 2015, De Graaf was named the best technical analyst for 11 consecutive years. He said that it is no coincidence that China introduced the most aggressive monetary easing policy in years. “Markets drive policies, just as policies drive markets,” he said.

His prediction contrasts with Morgan Stanley's newly revised target of reaching 4,000 points by June 2025. The latter means that compared to Thursday's closing, the Shanghai and Shenzhen 300 Index has little room to rise.

De Graaf advises investors to “maintain stop-loss and not be too arbitrary” when investing in the Chinese market. Currently, traders are awaiting the results of the Treasury Department policy briefing scheduled for Saturday.

De Graaf said, “We think China's policy response is self-protection, a response to weakness, and a Mario Draghi 'at any cost' moment that may occur in China.”

The former Lehman chief technical analyst also downplayed the potential risks posed to the Chinese stock market by the upcoming US presidential election. He said it was a “vaudeville show. It may be irrelevant; instead, it will be an opportunity.”