How long will the stock rally last?

The stronger-than-expected rebound of the Chinese stock market in the past couple of months has understandably raised the hopes and fired the imagination of the army of depressed investors and cash-strapped enterprises in the property and other sectors.

Since December, the benchmark Shanghai Composite Index has risen almost 18 percent, despite occasionally faltering, to 2,328.22 on Jan 21, touching a high of 2,332.78 on Jan 15. This market performance, seen as the strongest in about 48 months, has stirred a wave of exuberance in the stock analyst community, as if their fervent praying for the return of the bull for so long has been finally answered.

The stock market rally has also provided the much-awaited opportunity for the many thousands of more practical investors to unload at least part of their holdings to reduce the accumulated paper loss that has tormented them for the past several years. More than 500,000 investment account holders with various stockbrokerages have reportedly sold all their share holdings within the past month.