Rebirth of the Capital Legend

"Huayi Capital does not disclose its positions and holdings to the market in real time," said Jia Yongxiang. "Is it possible that the large number of positions this institution has deployed in the main line of 'big infrastructure' has been reduced and profit-taking has been made as the core leading stocks in the main line of 'big infrastructure' have continued to rise in recent times? I even suspect that Fuxing Road's large-scale heavy purchase of the cheque of Oriental Yuhong is to pull up the 'big infrastructure' line and provide a good environment for its main positions to exit and take profits."

"That's not the case," Song Shaopu said. "Whether analyzing from the perspective of the industry's fundamentals, or from the perspective of the expected future performance explosion of the entire 'real estate industry chain' main line, and the development of the industry scale, the 'big infrastructure' line has a strong underlying logic support.

Although the "big infrastructure" line has indeed increased a lot in the past two months.

However, compared with its future expectations, the current increase has not overdrawn future expectations, nor has it achieved the so-called expectation fulfillment.

In other words, the current valuations of the core leading stocks corresponding to the entire "big infrastructure" main line are not high.

Furthermore, the current size of funds of Huayi Capital is already quite large.

If one wants to adjust a huge position of tens of billions or even hundreds of billions of funds, it is very difficult to hide the action and leave no trace in the current market volume environment.

Therefore, I still insist on the main line of "big infrastructure" led by the institution "Huayi Capital".

Its main holdings should not have moved much and are already in a locked position.

As for 'Fuxing Road', which has made large purchases and dominated the speculation of 'Oriental Yuhong', the core leading stock in the two markets, this stock has always been a stock that the market has paid close attention to, and it has appeared on the Dragon and Tiger List frequently recently. Countless people study and watch the market every day. According to the current stock price, 'Fuxing Road' has a capital volume of nearly 3 million on this stock.

This position size is compared with the intraday transaction volume of this check.

It is unlikely to avoid the Dragon and Tiger List data and achieve the effect of exiting the market and taking profits without anyone noticing.

Therefore, it is highly likely that on the check of 'Oriental Yuhong', 'Fuxing Road' is also in a locked position.

In my opinion, the trend of the "big infrastructure" line in the past two days has been a bit weak, but it is just that it has risen too much in the previous period, and the market's short-term speculation sentiment has warmed up. A large number of active short-term funds in the market have switched between high and low, focusing on small and medium-sized and micro-cap concept stocks for speculation, and profit-taking. The underlying logic and fundamentals, and even expectations, have not been significantly shaken. "

"Mr. Song, do you mean that the rebound trend of small and medium-sized stocks is not sustainable?" Jia Yongxiang paused after listening to Song Shaopu's analysis, and then took over and said, "Mr. Song believes that the investment trend of the market and the main capital bias have not changed much compared with before?
But judging by the market trend...

Recently, there are indeed many major funds that have reduced their holdings in the main line of "big infrastructure" or weighty main line areas such as liquor, white appliances, medicine, consumption, electricity, and finance.

Moreover, it is also obvious at a glance that the performance of the ChiNext Index has been significantly stronger than that of the Shanghai Composite Index in recent days.

It is true that for the vast majority of small and medium-sized and micro-cap stocks that have rebounded strongly in the "emerging industrial chain" line, the underlying logic is indeed poor, and the fundamentals have not improved significantly. There is also no sign of cyclical reversal in the development of related industries. However, the absolute positions of these related main lines and related stocks are still quite low.

As for the ChiNext Index, it has gone through several rounds of stock market crashes and continued adjustments in the first half of this year.

It has fallen from last year's bull market high of around 4000 points to around 1500 points.

It feels that the current position of the ChiNext Index has indeed digested the so-called bubble valuation that was initially hyped up. The valuations of many small and medium-sized and micro-cap stocks have actually fallen to a relatively low level.

Near this position, I think it is entirely possible for some fund groups in the market to make a "high-low switch" to guide the market's investment direction to change.

Let’s look at the ‘big infrastructure’ line and the market weight line.

At present, the "big infrastructure" line has fulfilled part of the expectations after nearly two months of continuous rise.

At least not when the performance of leading companies in major industries are released.

The emotional expectations are already fully reflected.

As for the main line of weight, whether it is the white goods, liquor sector, or the electricity and financial sectors, most of the leading stocks in the related core industries have completed their valuation repair under the continuous guidance of various major funds in the past six months, and the stock prices have basically returned to near last year's peak.

In other words, the expectations for individual stocks related to the main weight line have also been reflected.

If the entire weighted main line wants to continue to raise the overall valuation, it will most likely require new policy stimulus or new performance expectation guidance.

The main line of "big infrastructure" and the main line of market weight have already risen to relatively high levels.

It also reflects the expectations at this stage, where there is insufficient upward momentum.

After sufficient time and space adjustments, the small and medium-sized stocks, that is, the main line of the entire "emerging industrial chain", seem to have become the relatively low point in the entire market at the moment, as well as the valuation depression, and have become the main line area that needs to be compensated for. "

"Do you think that many stocks in the main line of 'emerging industrial chain' have fallen to a very cheap level?" Song Shaopu looked at Jia Yongxiang and smiled, "I don't think so. Look at the core weighted stocks of the ChiNext Index, whether it is LeTV, Netspeed Technology, Oriental Fortune, Flush, Baofeng Technology... these stocks have a very high basic valuation, and due to their performance, when the performance of these companies enters a downward channel, as their performance decreases, their valuations will become higher and higher as their stock prices fall.

The absolute position of the ChiNext Index is indeed a bit oversold compared to the 4000 points at the peak of last year's bull market.

But this is more of a technical rebound after an oversold situation.

Without stronger underlying logic driving it and expected guidance for earnings growth amid a reversal in industry fundamentals, this kind of technical rebound is usually less sustainable.

In my opinion, there are currently stocks in the main line of the entire "emerging industrial chain".

Not to mention a cyclical reversal, even the valuation digestion has not been completed, which means that even the left-side opportunity to build a long position has not yet arrived.

Currently, these stocks have rebounded strongly and the market is very hot.

It’s just that a large number of retail investors in the market hold a large number of these stocks, and the strong rebound of these stocks is more likely to guide market sentiment.

This resulted in the apparent prosperity of the market.

In fact, I feel that there is not much main institutional capital invested in these related stocks and sectors.

What's more, these stocks have been in a long-term downward trend.

The internal historical lock-in is extremely heavy.

Even if there are signs of a reversal in the industry's fundamentals, a reversal in its stock price and a reversal in its trend will not happen overnight.

That is to say, no matter whether the current trend of these stocks is a rebound or a reversal, there will be another step-back confirmation process later.

If the subsequent pullback is confirmed and does not break the previous low, it can also be regarded as a signal with obvious bottom characteristics. At that time, we can make some adjustments to the positions to test the position.

If the pullback is confirmed, it will continue to create a new low.

That means these related main-line stocks have not yet gotten rid of the sustained downward trend and are still some distance away from the real bottom. So we have to continue to wait and see.

Overall, it doesn’t matter whether it is a reversal or a rebound at the moment.

The 'emerging industrial chain' line is not the time to adjust positions and intervene.

On the contrary, for the "big infrastructure" line, I think the current short-term adjustment is still a good buying point.

Indeed, the "big infrastructure" line has fulfilled most of the initial emotional expectations with two consecutive months of continuous rise.

However, the offline real estate market continues to be hot, and housing prices in cities across the country are still rising steadily.

At a time when countless real estate industry chain-related companies across the country and their business scale are expanding rapidly, huge amounts of funds continue to flow into real estate-related fields.

Its overall expectations and the corresponding underlying logic are still being strengthened.

What's more, the performance of the leading stocks in the entire real estate industry chain will not be bad as the scale is expanding rapidly and the industry is developing rapidly.

Furthermore, although the 'big infrastructure' line has continued to rebound for two months.

However, the absolute rebound height of the leading stocks in the relevant industry along the entire main line is not high, which means... there is still a very high investment cost-effectiveness.

What's more, they are the core weighted stocks of the entire "big infrastructure" main line.

The current technical trend, that is, the K-line pattern trend, has not reached the point of stagnation. Many stocks have not even touched the adjustment position of the 10-day line. However, the short-term rising rate has dropped a bit. It is too early to say that the rising trend of the "big infrastructure" line has ended and expectations have been fulfilled, right?

my suggestion is……

At present, our fund products should still focus on holding the core theme of "big infrastructure".

Other market main lines...

The weight line does need new policy stimulus or performance guidance from leading stocks in related industries to open up new expectation space and continue the trend.

The line of 'emerging industrial chain' has just been analyzed.

From the perspective of "certainty", I think that among all the main lines of the entire market, only the "big infrastructure" main line and the core leading stocks related to the real estate industry chain have the highest certainty, so we still have to stick to the previous trading strategies and investment ideas and not be easily shaken. "

"Okay, let's observe further."

Jia Yongxiang thought about it carefully for a moment and felt that what Song Shaopu said made sense, so he nodded in response.

Then, he turned his attention back to the two markets where trading was fierce.

While the two were analyzing the market trends and changes in the major market trends, the market trading time had already entered after 10:30 in the morning.

After one hour of continuous trading, the market performance of the two cities has entered a relatively stable stage.

In terms of market performance, the three major sectors of film and television media, Internet software, and Internet applications in the main line of the 'emerging industrial chain' are still in the lead and maintain the leading trend. Although other small and medium-sized, small and micro-cap industry sectors, and concept sectors have also performed well, their strength is slightly weaker.

The main line is "big infrastructure" and the main line is market weight.

It will continue to maintain a relatively shrinking adjustment trend, which is basically synchronized with the trend of the Shanghai Composite Index. Most of the leading stocks in related industries maintain a slightly red or slightly green trend.

In other words, the basic state of the entire market is still in a "big ticket set the stage, small ticket perform the show" form.

This kind of form performance...

Although the main institutions in the market are not very enthusiastic about following the trend and chasing the rise.

However, as a group of retail investors who are easily affected by emotions in the market and have large positions in small, medium and micro-cap stocks, their emotions are becoming increasingly high at the moment, and their willingness to chase the rise is also gradually increasing.

At the same time, short-term speculation in the market is gradually rising.

At this moment, in all major stock investment exchange forums across the Internet, the discussions among countless retail investors are becoming increasingly heated.

"Looking at this situation, the active capital flow in the market is all pouring into the oversold stocks of small and micro-cap stocks in the GEM, CSI 500 Index, and CSI 1000 Index." Noting that the gap between the growth rate of the Shanghai Composite Index and the GEM Index continues to widen, and the short-term speculation sentiment in the market is getting higher and higher, Zhao Zhiyuan, one of the main hot money groups of the "Qilu Gang", said excitedly, "If this sentiment continues... the gap between the growth rate of the GEM Index and the Shanghai Composite Index is estimated to be more than 2%."

"Today, the main line of market weight and the main line of 'big infrastructure' are indeed a bit weak." Zhang Wei took over and said, "Short-term speculation sentiment broke out, and the entire market's small and medium-sized stocks and micro-cap stocks basically showed the characteristics of a strong rebound. Although the Shanghai Composite Index did not rise much and basically did not move, looking at the entire market, more than 2300 stocks rose in the red market, which shows that the money-making effect of the entire market is still very strong."

"Yes!" Zhao Zhiyuan laughed and said, "Originally, the performance of the call auction in the early trading session was actually somewhat lower than expected. But after the opening... with the strong limit-up of 'Huawen Online', the emotions were instantly aroused. Today, this check from 'Huawen Online' has really made a great contribution, opening up the short-term speculation emotions and high speculation space of the entire market."

"That's true, but if this kind of sentiment continues..." Liang Jiucheng took over and said, "The entire small and medium-sized stocks and micro-cap stocks have reached a climax. I'm afraid it will be difficult to continue tomorrow. If the sentiment ferments too much, it will quickly accumulate too many profit-taking orders, which is not conducive to the continued acceptance of subsequent funds!"

"That being said, this is not something we can control," Zhao Zhiyuan said. "We can only follow the market sentiment and trend and go with the flow."

"It's hard to predict the market trend tomorrow," Zhang Wei said. "But the funds that took over the market today will probably make a premium profit tomorrow. And I think... the entire 'emerging industry chain' main line, a number of industry sectors, are still a little far from full fermentation of sentiment. Currently, only the film and television media, Internet software, and Internet applications sectors have achieved full outbreak. The others... can only be said to be relatively strong, and the initiative is still a little lacking."

"I don't think we need to think so much." Zhao Zhiyuan said, "The main line of 'big infrastructure' is adjusted, and the main line of weight is stagnant. It is natural for the active funds in the market to 'switch between high and low'. This speculation logic makes sense, and after such a strong short-term speculation sentiment arises, it will definitely stimulate a part of the off-site funds to enter the market to take over. Moreover... In fact, in the entire 'emerging industrial chain' main line field, the stocks of major industry sectors are at this position, but they have just begun to move out of the long-term formation, and the accumulated profit-taking is not much. I don't think we need to worry too much about the subsequent funds that will take over the long position. I feel that the trend change of the market's 'high-low switching' and the outbreak of short-term speculation have just begun." (End of this chapter)