I was born in the Year of the Horse and in my younger days, rode wild horses in the Australian outback, so let’s saddle up and see what the placards displaying the fortunes of the 12 Chinese Zodiac animals at Albert Street in Bugis can tell us about markets and China this year. The Year of the Fire Horse is a year of intense, fast-paced energy focused on freedom, innovation and bold, rapid change. It is a high-stakes, action-oriented year that rewards courage and ambition.
Markets on the run
Markets have already entered a fast-paced mode. The collapse of silver and other commodities has been rapid, although not unexpected. The US market continues to move to new highs despite growing concerns about debt, geopolitical instability and domestic instability. This sets up the US market for a fast-paced correction and potential rebound.
The Chinese economy is accelerating with advances in AI, green energy, robotics and high-end computing. Official policy refers to these as the new forces of production.
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They have been developing steadily through 2025 but are now poised to accelerate. It is similar to the Chinese electric vehicle (EV) industry. After years of slow development, Chinese EVs burst onto the scene last year. A similar accelerated trajectory is developing in the fast-paced areas of these new technological forces of production. Individual Chinese stocks in these areas will benefit from the acceleration. Battery maker CATL is high on the list and has a Hong Kong listing.
Innovation and bold, rapid change are excellent descriptions of what we can expect from China’s focus on these new areas of production. Businesses need to look for fast-moving competition driven by advances in robotics and the application of AI to manufacturing, design and development.
Low-altitude economy
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Another area to monitor is the development of the low-altitude economy. This is built around drone applications and it is not just about food delivery services. The low-altitude economy includes soil monitoring, agricultural and horticultural management, and other industrial applications. Combine this with robotics and AI and it signals fast development and paradigm shifts.
For investors and market watchers, the advantage is that Chinese stocks are well-suited for technical analysis. This helps overcome the limitations imposed by the lack of fundamental information available in English.
How to pick up these opportunities? We look for chart patterns of trend and trend momentum. The best of these are found in the areas of rapid technological development. We first review the chart, then investigate the company to determine its field of activity. It is an effective technique for identifying trading opportunities.
In my personal Albert Street outlook for the financial year, prudence is the key. I am advised to avoid impulsive investments and to be extra mindful of potential scams. Wealth will come from building long-term stability rather than chasing quick returns. I am instructed to think carefully before making major financial decisions.
Invest long-term
I take prudence to mean not chasing hot stocks or the moment’s trends. Rare earths are a good example where political hype drives fast-moving but unsustainable returns. Prudence doesn’t mean not trading these stocks. Prudence means understanding that the momentum in these stocks is temporary and volatile. The trading plan is adjusted accordingly, with tight stops to prepare for quick exits.
Wealth comes from the long-term stability of sticking with the trading methods and investment approaches which have been successful in the past. Stability means avoiding the temptation to try new trading methods or jump into hot sectors while maintaining tight stop-loss discipline.
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The long-term stability of my trading methods, applied for over 30 years, is to favour quick returns through well-tested, prudent trading. A handful of recent trades have returned between 20% to 50% over an average of six weeks. I am not about to abandon the techniques that consistently deliver these results.
In 2025, China’s economy surpassed RMB140 trillion ($25.7 trillion) and its massive market continues to expand. The Year of the Fire Horse promises fast-moving business and investment opportunities in China.
Daryl Guppy is an international technical analysis expert in financial markets. He has provided weekly Shanghai Index analysis for Mainland Chinese media for two decades. Guppy appears regularly on CNBC Asia and is known as “The Chart Man”.
