The recent rebound in China's equities has generated some optimism that the country's beleaguered stock market may be set for a turnaround.
The benchmark Shanghai Composite Index is up 4 percent in the past week and hovering at three-week highs, spurred by positive economic data.
The government's twin Purchasing Managers' Index (PMI) reports for the manufacturing and non-manufacturing sectors for July both came in better than expected, raising hopes that the slowing economy may be getting some of its growth mojo back.
Chinese stocks have been steadily climbing over the last couple of weeks, after the government unveiled a "mini stimulus" package in late July to boost business investment, leading many analysts to predict that more growth measures are on the way.
Still, China watchers are tempering the cheer, cautioning that the gains may be more of a knee-jerk reaction, rather than a pivot point for the markets.
"For now, it's still just a short-term rebound in a bear market. The stronger performance is due to policies to stimulate the economy and recent PMI data, which show China's economy is stabilizing," Jackson Wong, vice president at financial services firm Tanrich Securities told CNBC.
(Read more: China fires growth salvo, is monetary easing next?)
In order for the market to sustainably reverse its longer-term downtrend, domestic investor sentiment would need to recover substantially, Wong said, noting that this shift may happen if China delivers a sustained improvement in economic data over a period of a few months.