The chart shows the 200-DMA, the previous intermediate top and the fibonacci retracement level all intersecting at about the 3500 odd levels. This is the point from which the index has taken support and bounced back with vigor. Its early yet but if the worst of the pounding is over and if the mom-and-pops are out of the trade then the large institutional investors would definitely build long positions at/around current levels.
meanwhile here are interesting quotes from fund managers on the issue:
1) " “I wouldn’t call it a stock-market bubble, but it was a very quick boom and bust,” said Bill Kennedy, manager of the $11.2 billion Fidelity International Discovery Fund, which mostly invests in stocks outside of the U.S. About 1.8% of the fund was in Chinese companies as of the end of May. “I still have a list of stocks that I like and as they hit target prices I will buy them,” he said. "
2) " “Without a doubt, there are today some pretty wonderful opportunities to own specific companies that are trading significantly cheaper than they have historically and are trading at a discount to their fundamentals,” said Safa Muhtaseb, portfolio manager of ClearBridge Investment’s Global Value team. Still, given the potential for more volatility, he said he’s “not going to back up the truck and build new positions,” but he is interested in adding to existing holdings. "
and this one is my favorite...
3) " “We’re neutral on Chinese equities, which is a result of realizing equities are attractively valued but very volatile,” said Mr. Mariscal of UBS. " ----- Duh !!!
All of the above meaning - we are looking to buy! So hold onto that cookie!!