Rebirth of the Capital Legend

"It seems inevitable that the Shanghai Composite Index will break through 3000 points, but whether it can hold steady is still uncertain." Yu Xiaolu took over the conversation and said, "In the short term, the Shanghai Composite Index has reached this position, which has already had a siphoning effect on 3000 points. In the medium and long term, the continuous selling pressure around 3000 points and the heavy historical locked-in positions of the Shanghai Composite Index are still highly uncertain.

However, as long as the overall market trend can maintain a relatively active state.

The overall market sentiment is not as bad as before. There can be intermittent or local continuous profit-making effects, so there is no need to worry too much. As long as the volume can be maintained slightly and there is strong underlying logic support, the main line of "big infrastructure" that is strongly expected in the future may be able to continue to hit a high space. "

"That's right." Lu Xiangxiang responded, "At the current stage, we should pay attention to the changes in the market's volume. If the volume can continue and show a steady increase, it means that the market's bullish sentiment has generally warmed up. After the stage of investment confidence recovery, it has indeed attracted some off-site funds to enter the market. We can actively look at it above 3000 points. After all, at this position of 3000 points, the historical locked-in positions in the early stage are relatively heavy. If we don't increase the volume to exchange a large number of chips, if the volume shrinks... even if it breaks through 3000 points, it will be difficult to stand firm.

Secondly, we should also pay special attention to a number of short-term popular core concept stocks in the market.

Although these short-term core concept stocks are not our positions, their impact on market sentiment and the continued progressive effect on investment confidence are still relatively critical. If these short-term core concept stocks can create a high space for sustainability and speculation under the joint influence of hot money and a large number of retail investors' funds.

Then, it will definitely have a positive effect on the entry of off-market funds.

In addition, we should pay special attention to the trends of the main weighted sectors, including liquor, white appliances, medicine, consumption, electricity, finance and other core sectors, as well as the trends of A50.

Let’s see how these core sectors will perform next, whether it will be up or down.

If it moves upward, we must guard against the market entering a trend of institutional funds concentrating together again. If it adjusts downward, it will still be difficult for the Shanghai Composite Index to stabilize at 3000 points. "

"Mr. Lu, what do you think will be the trend of the core weighted sectors such as liquor, white goods, medicine, consumption, electricity, finance, etc., as well as the trend of A50? "Yu Xiaolu asked, "I feel that this core line, whether it goes up or down, at this stage, is a relatively negative feedback for the development of the overall market!"

"That's true," Lu Xiangxiang responded. "These weighted mainline sectors have a large number of institutional main funds and the 'national team' holding positions together. The chip structure is relatively well-preserved and the circulating market is huge. Especially after many stocks have almost recovered the losses of the three rounds of stock market crashes last year, their upward space has been suppressed to a certain extent for future changes in expectations.

If the market continues to break upward forcefully, the divergence among these core weight sectors will inevitably increase.

As the differences grow, a large amount of buying funds will be needed to take over.

This is bound to siphon the buying liquidity of other main sectors in the market, resulting in a lack of liquidity and proactive buying in other main sectors.

However, in the past few days, the trends of these weighted main sectors and their performance on the market have been very good.

I think that under the current situation, these weighted main sectors, with subsequent performance expectations not yet reflected and no new progressive changes expected in the future, the main institutional funds and "national team" funds that are grouped together in them are unlikely to dominate this core main line and make an upward breakthrough.

After all, without the subsequent strong support of future expectations, the long-term forces in the entire market will not be able to form a highly consistent synergy on these weighted main lines that are at relatively high levels and no longer have much valuation advantages.

However, the probability of a downward adjustment... doesn't seem to be high.

After all, although in these weighted main-line areas, some of the institutional main capital groups that had been grouped together in the early stage have begun to take profits and sell off.

However, since most of these weighted core stocks are still the best in the entire market, with relatively certain future prospects, good fundamentals, low investment risks, and valuations that are relatively within a reasonable range, at their current valuations, current positions, and with a high probability of continued strengthening in future prospects, these stocks still have considerable investment value and are still the only choice for the main institutional capital groups with huge on-site capital volumes when it comes to position selection.

After all, the current market, as a whole, is still in a deep bear market phase.

Even though the recent rebound has boosted some market bullish sentiment and investment confidence, the vast majority of investors trading in the market still lack confidence and have doubts about whether this rebound can turn into a reversal and how continuous and sustainable it can be.

Since the market has not yet ushered in a definite reversal opportunity, and the overall situation is still in a bear market phase.

Then, certainty becomes very important.

Many major capital groups that have previously invested in these weighted main-line areas will not easily abandon these stock chips and choose new investment directions when they already have considerable cost advantages.

Therefore, except for a small number of profit-taking, there will be some loosening.

On the entire weighted main line, the large core chip structure will not loosen significantly before the market has not escaped from the bear market pattern and has not truly ushered in a right-side opportunity with relatively high certainty.

These large institutional funds will not rashly sell off their weighted main-line chips.

This means that the potential selling pressure of these weighted main sectors will not increase further. Without huge potential selling pressure, there will naturally be no sustained shock and downward adjustment, or a rapid sell-off trend.

Overall, the entire weighted main sector and the A50 index trend.

The biggest trend probability is to maintain sideways fluctuations. "

"Yes, I think so too." Yu Xiaolu said, "The probability of the A50 index and the main weighted sectors continuing to break through upward or continue to adjust downward is not high, and the probability of maintaining sideways is higher.

Moreover, the main line of "big infrastructure" has already shown an upward breakthrough trend.

At the same time, a large amount of short-term speculative funds continue to flow into the small-cap and micro-cap stocks in the market to make an "oversold rebound".

When short-term bullish sentiment quickly picks up, many short-term capital groups begin to abandon certainty and choose flexibility.

There will not be so many on-site and off-site long-term capital groups pouring into the main weight line to speculate.

In general, with the rapid recovery of short-term investment sentiment in the market, the active buying of the entire weighted main sector will definitely gradually decline.

Moreover, I think the main line of weight will maintain sideways fluctuations.

It is also the best for the overall market trend.

When the weighted main line breaks upward, it will siphon the buying liquidity of other main lines in the market, causing the upward trend of other main lines in the entire market to be suppressed.

The main line of weight continues to adjust downward.

This will in turn affect the bullish sentiment and confidence of the entire market, dragging the index down to an upward breakthrough.

Maintaining a sideways trend will have little impact on the overall market sentiment, and without the weighted main line siphoning liquidity from other main lines in the market, other market main lines will be able to generate sufficient short-term profit-making effects and long sentiment.

Just like the trend of the past two days, A50 maintained a sideways trend or a slightly downward trend, while other main lines of "big infrastructure" and "oversold rebound" were fully focused on breakthroughs, forming a market trend pattern of "big tickets setting the stage and small tickets performing the show", which is naturally the best. "

"Well, the market is likely to go this way." Lu Xiangxiang said, "The A50 index, as well as the main sectors such as liquor, white goods, medicine, consumption, electricity, finance, etc., have insufficient upward and downward momentum, so they can only maintain sideways. As long as the main sectors with heavyweights maintain a sideways trend.

At present, the market's bullish sentiment and investment confidence have clearly rebounded.

The various active fund groups in the market, or some off-market fund groups that are attracted in, will most likely converge on the main sector with the strongest money-making effect.

And the main line sector with the strongest money-making effect...

At present, the main line is "big infrastructure", and there are also oversold stocks in small and micro-cap stocks.

The 'big infrastructure' line, after a large-scale adjustment in volume the day before yesterday, rebounded with a small volume yesterday. Obviously, the overall chip structure is more reasonable, and there are more funds locked in the internal positions. After breaking through the upper edge of the previous oscillation platform, a substantial breakthrough was formed, and the high point of the oscillation platform below formed a strong platform support position.

There is a relatively high degree of certainty that its market trend will be upward.

As for the 'oversold rebound' line, currently small and micro-cap stocks have generally undergone a continuous decline and adjustment lasting more than half a year or even a year.

There are indeed cases of severe oversell.

Moreover, the share prices of many small and micro-cap stocks are relatively low, and many stocks have even fallen to their historical lowest levels.

There are also historical trapped shares that were concentrated in the early stage, which are some distance away from the current stock price position.

In other words, small and micro-cap stocks currently generally have a gap in their chip structure and the upward pressure is not great.

Therefore, this caused concentrated speculation from many short-term capital groups in the market.

This is also the period of sustained rebound.

Judging from the current sentiment, the speculation of small and micro-cap stocks driven by the "oversold rebound" will most likely continue for a few days, or for a period of time.

However, once this line begins to touch the previous concentrated historical trapped area.

If there is no new major positive stimulus, or if the fundamentals improve significantly, then there is a high probability that another harvest and adjustment will begin.”

"Well, so... Overall, if our fund's positions are to switch to an offensive strategy at this moment..." Yu Xiaolu said, "it should be more appropriate to continue to increase positions in the core leading stocks of the 'big infrastructure' main line, as well as the industry's leading stocks with heavyweights, right?"

Lu Xiangxiang responded: "That's for sure. In the current market, the trend of 'big infrastructure' is the strongest, and only this line has formed a strong and substantial breakthrough trend. There is no reason not to choose this core line for long positions. As for the 'oversold rebound' line, the trend of the past two days and the relevant data of the Dragon and Tiger List can prove that there are not many major institutional funds involved.

From the beginning till now...

The funds that speculate on these small and micro-cap stocks have always noticed the recovery of bullish sentiment in the market, and have seen an influx of speculative short-term hot money and many retail investors following the trend.

Without large amounts of long-term funds locked up, there is basically no possibility for the development of medium- and long-term trends.

Therefore, the 'oversold rebound' line, and even the trend of small and micro-cap concept stocks in the entire market, may seem to be rising rapidly at the moment, but it is highly likely that they will not be sustainable.

From a medium- to long-term perspective, it feels like the market will continue along its previous investment style.

That is, after this wave of oversold rebound of small and micro-cap stocks.

Once the short-term market sentiment cools down again, the market will most likely return to the trend dominated by institutional funds, focusing on market weight, blue chips and other high-performance stocks.

And I always think...

Only by allowing the main capital groups to continue to focus on these high-quality heavyweight, blue-chip and growth stocks.

Guide the market in a positive investment direction.

Only then can we truly change the investment ecology of our A-shares, and our A-shares can truly usher in a relatively good long bull market in the future.

If short-term speculation dominated by hot money is allowed to run rampant.

In the end, the market will simply repeat the bull market of 14 and 15. After a wave of concentrated speculation, it will usher in a long bear market again.”

"I also feel that the market has not yet deviated from the investment style orientation dominated by weight, blue chips and growth." Yu Xiaolu said, "After all, fundamentally speaking, the main capital group that can truly lead the trend in the market should still have a deep impression of the three tragic stock market crashes experienced in the past six months. They will not rashly choose concept stocks for concentrated group speculation."

Along with the two people's discussion on the overall market trend, the changes in market style, and their predictions...

Soon, under the watchful eyes of the crowd, the time came to 9:15 and the two markets ushered in the opening call auction.

With countless eyes focused, the stagnant stock markets of the two cities jumped rapidly, and then, at 9:16, they opened higher across the board. Almost all market industry sector indexes and 80% of the market stocks opened significantly higher.

Among them, there are the highly anticipated 'big infrastructure' theme and the 'oversold rebound' theme.

The related real estate development, building decoration, building materials, nonferrous metals, steel, coal, film and television media, Internet software, electronic information... the growth rates of a number of industry sector indexes are all at the top of the two cities' industry sector index growth list, and the three major industry sector indexes of film and television media, Internet software, and Internet applications are showing a trend of leading the market's industry sectors.

This initial call auction situation and the performance of related industry sector indices.

It is enough to show that after the emotional brewing after yesterday's closing and the emotional fermentation in the early trading, the active capital groups in the market have begun to focus on embracing the main line of "oversold rebound" with high elasticity and strong rebound expectations. (End of this chapter)