Rebirth of the Capital Legend

"The mood before the market opens is really hot. Judging from the situation, the two markets will open higher without a doubt." Seeing the excited scenes on major stock investment exchange platforms across the Internet, Zhao Qiang, who is in the main hot money group of the 'Yuhang Group', laughed and said, "Brother Sun, you seem to have made a lot of money this time. With such a strong bullish market sentiment, the market enthusiasm and discussion heat of 'Oriental Yuhong' is also high. It is estimated that the leading stock in the two markets will open with a growth rate of at least 3%, and it is very likely to quickly shrink and hit the daily limit after the opening."

"The bullish sentiment before the market today is indeed strong." Sun Chengyu responded in the group, "But I think the probability of Oriental Yuhong opening higher with reduced volume and quickly hitting the daily limit is still low. After all, the previous increase of this stock has been quite large, and there have been many profit-taking orders recently. Even if the expectations are strong and the funds in the market are heavily locked, the pressure of profit-taking is still not small. It is definitely difficult to quickly hit the daily limit with reduced volume."

"It is estimated that it will still fluctuate upward and the trend will mostly strengthen." Lao Qian in the group continued, "Compared with the popular stocks in the core main line of 'big infrastructure', 'Oriental Yuhong', 'Golden Land Group', 'Huaxin Building Materials', 'Huaxin Cement', 'Capital Group', 'North Frontier Communications Construction'... among these large number of popular stocks, I think the probability of Capital Group, Huaxin Cement, and North Frontier Communications Construction going up in succession is higher."

"Why?" Zhao Qiang said, "In terms of popularity, the discussion and market attention of these checks cannot be compared with the check of 'Oriental Yuhong'."

"It's definitely not as popular as them." Lao Qian said, "But these stocks have the advantage of small market caps and low positions. The short-term increase of 'Oriental Yuhong' has exceeded 30%. At this high position, the probability of continuing to rise and shrinking the volume to reach the daily limit is not high. Although the pre-market sentiment is hot today, it cannot change the current market, which is still a bear market. It cannot change the fact that the market liquidity is still slightly lacking.

Moreover, the funds controlling the stock market of "Oriental Yuhong" are basically not hot money.

The market is mainly controlled by institutions.

However, when institutions control the market and continue to hit the daily limit, it is easy to overdraw expectations in advance and excessively consume the long power of this check.

A strong trend is in line with the nature of this stock and the interests of various internal funds. "

"What Lao Qian said makes some sense." Although Sun Chengyu currently holds a large position in the stock of 'Oriental Yuhong', he is still relatively rational from a psychological point of view. He responded with a smile, "As far as the current situation is concerned, the strengthening trend is more conducive to the subsequent market fermentation of this check and to opening up a wider space for height. Moreover, the historical stock characteristics of this check determine that it is difficult for this check to follow the pattern of continuous daily limit. In terms of the expected height of pure short-term speculation, the checks mentioned by Lao Qian, such as Beijing Capital Group, North Xinjiang Communications Construction, and Huaxin Cement, are indeed better.

But no matter what the opening expectations and opening trends of these popular stocks are, whether they can hit the daily limit or not.

None of them can change the current surge in bullish enthusiasm and capital following the core theme of "big infrastructure", nor can they change the main trend of the market and the upward driving force, which is the core theme of "big infrastructure".

That is to say, no matter what the opening trend is.

Today, the performance of stocks related to the "big infrastructure" line should not be too bad, so you can actively go long. "

"That's right." Zhao Qiang nodded and said, "As for whether the entire market has broken through the previous shock platform, there is still some debate because the Shanghai Composite Index closed below 2950 points yesterday. If the entire market can open high and go high today, it will create a big positive line in one fell swoop.

No matter whether this big positive line has a significantly larger volume or a significantly smaller volume.

These should all be able to indicate that the market has already formed a breakthrough trend.

As long as the market actually breaks through the previous shock platform, a relatively clear upward trend will be formed.

So, even if we don’t invest in the “big infrastructure” market, we can still make speculation or investment opportunities by focusing on other market main lines and other oversold stocks at low levels.”

"Well, we can also see from the pre-market sentiment that the attention paid to small and medium-sized stocks, as well as the attention paid to the main lines of the oversold market, are all increasing." Lao Qian nodded and responded, "Looking at this situation, the major market indices will continue to break upward, and there should be no suspense."

"The overall market trend is upward, there should be no suspense." Sun Chengyu continued, "But in terms of the specific main line performance, I think there should still be a lot of differences, and the divergence of the main lines of the market is likely to continue. In other words, even if the market index continues to move upward, the specific main lines of the market are very likely to be out of sync, and the divergence may become more serious."

"Haha, I think so too." Lao Qian agreed. "In short, in one sentence, the current market liquidity cannot attract a large amount of off-market funds to enter the market before the entire market reaches a certain height, that is, before a sufficiently consistent and continuous profit-making effect is formed. Naturally, it cannot support the synchronous upward trend of all the main stocks in the entire market."

"That is to say, now, and even in the next period of time..." Zhao Qiang said, "the market is most likely still in a stock game?"

Sun Chengyu nodded and said, "That's for sure."

"In that case..." Zhao Qiang pondered for a while, and then said, "If the market of 'big infrastructure' wants to ferment further and reach a higher level, it has to continue to siphon the buying liquidity of other main lines in the market?"

"It's likely to be the case." Sun Chengyu continued.

"But other weak mainline sectors in the market have no liquidity to be siphoned by the 'big infrastructure' line." Zhao Qiang said, "This can be seen from the market trends yesterday and last Friday. The Internet software, film and television media, new energy industry chain, electronic information, and other low-level oversold mainline sectors that were previously severely siphoned by the 'big infrastructure' mainline have not had much money willing to sell due to excessive oversold and internal chip gaps, resulting in a rapid decline in the trading volume of individual stocks in these mainline sectors, and no liquidity can be released.

Since the "big infrastructure" line cannot absorb the liquidity of these main sector stocks.

So where is the upward momentum coming from?”

"In the conceptual mainline fields where small and medium-sized stocks are located, the main capital groups have basically withdrawn completely, and it is the retail investors who are squeezing in. Moreover, most stocks are seriously oversold, and there is a gap in chips. There is really no liquidity, and not many funds are willing to sell at a loss." Lao Qian took over and said, "But the internal component stocks of the A50 index, that is, liquor, white appliances, medicine, consumption, electricity, finance, petrochemicals... these mainline sectors with weight attributes, the stock prices of the related weighted stocks are very high.

And due to the continuous upward trend in the previous six months, the main capital group has emerged in these individual stocks.

Basically, they all made a lot of money and the profit taking was quite serious.

If the chips of these stocks loosen along with the overall rise of the "big infrastructure" main line and the oversold rebound of small and medium-sized stocks in other markets.

I think the liquidity released by these heavyweight stocks is not small.

In fact, the share prices of these stocks have basically recovered the losses from the previous three rounds of stock market crashes, and many individual stocks have even returned to their historical highs.

Just consider its valuation and the current stock price position.

These stocks also have considerable profit-taking and the need to loosen up internal chips.

Moreover, these stocks have been in a high-level oscillation mode in the past two or three months, and can no longer be pulled up. As for the banking sector, whether it is from the K-line pattern or the recent market trend of the main internal funds, it is almost time for adjustment. "Old Qian, what do you mean..." Zhao Qiang paused and continued, "The market blue chip group trend that has continued for more than half a year will collapse? Will the liquidity gathered by the large-cap blue chip stocks be dispersed to the small and medium-cap stocks in the market again?"

Old Qian laughed and said, "This is just my guess. Whether it will go this way or not still depends on the market trend itself."

"I think this possibility is not very high." Zhao Qiang said, "From a medium- to long-term perspective, it is basically impossible for the market to get out of the bear market in the short term, right? As long as the bear market is still there, the situation where the A50 index weighted stocks, which are safe-haven stocks, are concentrated by many major institutions is unlikely to collapse.

Furthermore, there are actually sectors with weight attributes such as liquor, white goods, medicine, consumption, electricity, finance, and petrochemicals.

The share prices of related core leading stocks will continue to rise.

In addition to the promotion of group institutions, the fundamental reason is that the fundamentals of these industries are improving and future expectations are improving. This is the fundamental reason.

Without the impetus of these long-term logics.

If it were only because of the institutional clustering and the risk-averse capital movement after the market entered a bear market, the leading stocks in these industry main lines would never have reached their current high positions.

As long as the long-term fundamentals can support the current stock price and the valuation can be digested with future performance improvements.

Therefore, even if the leading stocks in these defensive main-line sectors are temporarily overvalued compared to the overall market valuation, the phenomenon of institutional clustering will not collapse.

There are also many concept theme sectors where small and medium-sized stocks are currently located.

It seems to be seriously oversold, but in fact, compared with its position before the start of the bull market last year, and compared with its future expectations and future performance, it still appears to be quite overvalued and has a certain bubble.

That is to say...

Many of the main sectors in which these small and medium-sized stocks are located have no fundamental support.

The logic of a short-term oversold rebound exists, and there is also a demand for it, but the logic of a long-term reversal does not hold, and it is still difficult to gain the attention of the main capital groups that follow the medium- and long-term investment logic in the market.

As for the line of 'big infrastructure'...

I don't deny that this line is currently on the cusp of the trend, and the fundamentals of the industry are undergoing tremendous changes, and it has extremely strong upward explosive power.

However, it will not be easy for this line to siphon the liquidity of the main weight sectors such as liquor, white appliances, medicine, consumption, finance, electricity, petrochemicals, etc., which have been heavily supported by major institutional groups.

Of course, it’s actually the location of ‘big infrastructure’.

As long as the internal chips can settle down, many major institutional capital groups that intervened in the early stage can continue to lock their positions, continue to shrink the volume and oscillate upward, they will also be able to get out of it.

Overall, I am not pessimistic about the trend of "big infrastructure".

Similarly, we are not pessimistic about the performance of leading stocks in weighted industry sectors such as liquor, white goods, medicine, consumption, finance, electricity, petrochemicals, etc.

Instead, it is the main concept theme that is concentrated on many small, medium and micro-cap stocks that are currently being discussed enthusiastically.

I still hold a relatively pessimistic attitude.

After all, once a market investment style is formed and a strong trend is formed, the basic logic supporting the evolution of its trend will not loosen.

It is still quite difficult to change this trend.

The fundamental motivation for us to trade is to follow the trend, rather than to speculate on the trend and do things that go against the market trend. "

"What Xiao Zhao said... does make some sense." Sun Chengyu listened to Zhao Qiang's analysis, pondered for a while, and said, "From the perspective of investment trends, market uncertainty still exists. In this case, let's not speculate on the overall investment trend of the market. Let's first look at the 'big infrastructure' line and see how it changes after the market opens. If the market trend of this line is maintained, we will see from which direction its liquidity comes... In this way, we can judge the subsequent market trend and the overall trend."

Lao Qian nodded and said, "Okay, anyway, it will never go wrong to focus on the 'big infrastructure' line."

After saying that, several people turned their eyes to the two market situations.

At this time, the market's trading time had already arrived at 9:15 amid heated discussions across the entire network, and the two markets ushered in the initial call auction.

When the time officially moved to 9:15.

Under the watchful eyes of countless market investors, the two stock markets were frozen and jumped rapidly, and then, under the expectant gaze of everyone, they showed a trend of opening higher across the board.

At 9:16, the situation of the initial call auction in the two markets became clearer.

At this time in the two markets, 90% of the stocks opened higher in the green.

Among them, the industry sectors related to the main line of "big infrastructure" that has attracted much attention, including real estate, building decoration, building materials, nonferrous metals, steel, coal, etc., all opened higher by more than 1.5%, and the most popular core leading stocks, "Oriental Yuhong", "Capital Group", "Huaxin Cement", "North Frontier Communications Construction"... These stocks all opened higher by more than 7%. (End of this chapter)