Rebirth of the Capital Legend

"Well, I also feel that the sentiment feedback of the 'emerging industrial chain' line does not match the market trend, and it is not as strong as imagined." Lu Xiangxiang heard Yu Xiaolu's words, pondered for a moment, responded, "Especially in terms of volume, it did not show a positive effect, but today the 'big infrastructure' line, as well as the main board direction of liquor, white appliances, medicine, consumption, electricity, finance and other core main lines, the performance is also quite sluggish. Fortunately, there is no new market main line hot spot outbreak to divert the short-term active speculative capital group gathered in the 'emerging industrial chain' main line field, so... the 'emerging industrial chain' line, although the market performance is not so strong, it is still acceptable, not generally lower than everyone's psychological expectations, and under the relatively expected trend, it makes sense that the funds on and off the market continue to wait and see, let's wait and see, I feel that the trend in the afternoon may indeed change."

"It's a pity that the 'big infrastructure' line didn't come out today." Yu Xiaolu continued, "Originally, the 'big infrastructure' line was quite strong in the early call auction stage, and several core leading stocks also performed better than expected. Unfortunately... after the two markets officially opened, the rapid daily limit trend of 'Huawen Online' further stimulated the 'emerging industrial chain' main line, which had already slightly diverged, causing the active capital group that flowed to the 'big infrastructure' main line in the call auction to be attracted to the 'emerging industrial chain' line again."

"Looking at the K-line trend of a number of core concept leading stocks, there are still some problems with the time and space for adjustment of the 'big infrastructure' line." Lu Xiangxiang said, "I think for this line, adjusting the time a little more to make the internal chip structure more stable may be more beneficial for the future market space development. We still need to be more patient. The current expectations and underlying logic of the 'big infrastructure' line are still there and have not changed much. Looking at the volume feedback during the adjustment phase, there is no sign of large-scale withdrawal of the main institutional funds that gathered on this line before, so... I don't think there is a big problem. This line will rise sooner or later."

"What about the 'emerging industrial chain' line?" Yu Xiaolu continued to ask, "Is Mr. Lu planning to transfer some of our fund products to this line?"

Lu Xiangxiang's eyes were firm, and she smiled and said, "Let these active short-term fund groups in the market and the retail investors who follow suit speculate on this line. In my opinion, although the market has generally gone through the trend of 'high-low switching' in recent days, and the major industry sectors of the 'emerging industrial chain' in the main field of film and television media, Internet software, and Internet applications have siphoned a lot of attention from the active fund groups in the market, the fundamentals of this line actually seem to have not improved or shown any signs of reversal, and it seems that its fundamentals are still in a trend of continued deterioration.

In other words, there are problems with the underlying logic of these core industry sectors.

The current market performance is so strong, as well as the rebound trend for several consecutive days.

I think the first reason is that these sectors have benefited from the worst performance in this round of bull-bear market transition. Their relative positions are low enough, or at least they seem to be low enough.

There is also the stimulation from recent market news and some policy news.

Of course, there is also the factor of a change in market direction as market investment sentiment has generally warmed up, with many speculative funds starting to choose small and medium-sized stocks with greater elasticity for speculation.

But in my opinion, these so-called factors that stimulate stock price increases are not the decisive factors that can support these stocks to develop a long-term trend.

In other words, these are the leading stocks in the concept of "emerging industrial chain" that are performing very well at the moment.

It is difficult to achieve a long-term upward trend like the core leading stocks in the main field of "big infrastructure" based on market sentiment alone without the support of underlying logic.

If we cannot break away from the long-term trend, the profit space for gambling will be very limited.

Since the profit space for gambling is very limited, there is no need to spend too much time and attention on this main line and its related hot sectors.

in summary……

Under the current market trend, the most cost-effective on-site investment is still the core sector of "big infrastructure".

First, expectations for a fundamental shift are the strongest.

Secondly, in terms of relative valuation, since the relevant industry sectors of the "big infrastructure" main line are basically traditional industry sectors in the past, the original valuation given by the market was relatively low. Under the major changes in fundamentals and the expectation of explosive performance, the expectation gap that can be given is naturally the largest.

There are also sectors such as liquor, white goods, medicine, consumption, electricity, and finance that can be compared with the main board.

Although there is already a lot of institutional funds deposited in the "big infrastructure" line.

However, judging from the heaviness of the sedan chair, the sedan chair of the "big infrastructure" main line is still much lighter than the sedan chairs of the main lines of liquor, white appliances, medicine, consumption, electricity, and finance in the main board direction, and there is not so much internal potential selling pressure.

The reason why this line is not rising at the moment.

This is mainly because the previous expectations have been partially fulfilled in the continued rise in stock prices.

However, the expectation of new performance explosion is not certain enough, or it requires a lot of hot core stocks and industry-leading stocks to be verified.

In addition, after the market investment sentiment has recovered, funds generally choose to speculate on small and medium-sized stocks with high elasticity.

As a result, the active capital flows that were originally concentrated in the "big infrastructure" line generally took profits and were diverted to the "emerging industrial chain" line, resulting in relatively insufficient buying power on the "big infrastructure" line, unable to further push up the stock price.

But these two factors.

With the subsequent disclosure of the third quarter financial reports of many related companies.

As for the 'emerging industrial chain' line, the related popular concept leading stocks have begun to touch the previous historical trapped positions. With the accumulation of profit-taking of these oversold rebound stocks and the accumulation of selling pressure from previous floating trapped positions, the corresponding stock prices have fallen under the joint suppression of profit-taking and trapped positions, and the losing effect of the entire main line has occurred.

So, these are the active groups of funds in the market that are now gathered on the main line of the 'emerging industrial chain'.

There is a high probability that funds will flow back to the main line of "big infrastructure" to go long.

By then, it is highly likely that the "big infrastructure" line will end its short-term adjustment and continue to expand upward.”

"Well, Mr. Lu's analysis makes sense." Yu Xiaolu said, "But Mr. Lu, the first basic condition for your point of view is that it is based on the general recovery of market investment confidence, the index will not experience a large retracement, and can maintain this upward trend, right?

But I feel that after the Shanghai Composite Index broke through 3050 points, its upward momentum has obviously become weak.

It seems that if we cannot take advantage of this wave of hot market sentiment and the short-term speculation created by the numerous hot money and retail investors in the market, thereby attracting some off-market wait-and-see funds to enter, the overall trading volume and turnover of the market will rise to a higher level.

With the current market capital stock, it would be difficult to push the index up further.

And if the index fails to go up and remains at this position with shrinking volume and sideways fluctuations, I feel... it may not be easy for it to stay sideways.

I feel there is a high probability that it will continue to fall back to the 3000 point level for further breakthrough confirmation.

If the index moves in this way, the market trends of the major hot main lines and the trends of the corresponding stocks will be very uncertain. "

"It is possible for the Shanghai Composite Index to fall back to 3000 points." Lu Xiangxiang took over and continued, "However, there is basically no risk of falling below 3000 points again in the short term, because whether it is the main weighted main sectors such as liquor, white goods, medicine, consumption, electricity, finance, or the main sector of 'big infrastructure', the momentum for a sell-off is insufficient, and the overall fundamentals of these main sectors are also improving, so there is no condition for a sell-off or a sell-off in valuation.

What's more, at this stage, whether it is the trend of the external US stock market or the trend of the Hong Kong stock market which is linked to the trend of A-shares, they are actually quite good and there is not much risk.

Especially the Hong Kong stock market...

Looking at the recent trends in the Hong Kong stock market, it is obvious that in the corresponding "big infrastructure" main line area, a number of domestic real estate stocks, as well as stocks related to the building materials and steel industries, are performing much stronger than the A-share market. Take the "Anhui Conch Cement" listed on both the A and H exchanges as an example.

Obviously, the stock price trend in the Hong Kong stock market is smoother.

And there are more potential buyers.

I remember that in the first two months, the stock price was at the historical bottom and was not paid attention to by a large number of institutional main funds. Its AH stock price in the Hong Kong stock market was about 20% lower than that of A shares.

But if you look at it now, the price difference between the two stock markets has been basically eliminated. The stock price in the Hong Kong stock market is even slightly higher than that in the A-share market by about 2%, and a corresponding AH premium effect has emerged.

This is quite rare in the entire market.

Of course, this AH premium effect also illustrates that different funds in the two markets have different attitudes towards the same company and the same stocks.

This also shows that many institutions in the industry are still generally conservative in their expectations for the future of the core leading stocks in the "big infrastructure" line.

Since the expectations of the corresponding major institutions are inherently conservative.

Well, in the peripheral markets and the Hong Kong stock market, the performance is relatively good, and the bullish trend is still continuing.

There is unlikely to be a risk of a major correction, and there will hardly be any motivation to sell at a loss.

What's more, due to the outbreak of the main line of "emerging industrial chain" in recent days, the profit-taking that was originally concentrated in the main field of "big infrastructure" has continued to be diverted.

As a result, there are not many short-term profit-taking orders in the main area of ​​"big infrastructure" now.

In other words, without the selling pressure from profit-taking, there won't be enough selling force to suppress the market if there is a sharp drop in prices!
As for the main board sectors such as liquor, white goods, medicine, consumption, electricity, and finance.

These main sectors have not seen much growth as the Shanghai Composite Index broke through 3000 points in the past two months, and have been in a sideways adjustment trend with shrinking volume.

The main institutional funds gathered there include the capital group that adjusted to the main line of "big infrastructure" early on.

Basically, there is no reason to appear at this time.

In other words, the entire main sectors of liquor, white goods, medicine, consumption, electricity, and finance had already adjusted two months ahead of the market after the main institutional funds had continued to hold together for almost half a year. At present, the chip structure in these main sectors has become quite stable.

There are also not many floating chips that can crash the market.

The main institutional funds concentrated on these main lines have no motivation to dump the market.

After all, the fundamentals of these main sectors are still relatively stable and are gradually improving, and there are no conditions for further compression of valuations.

Overall...

If the market index is to fall back to 3000 points.

Relatively speaking, the market with a greater risk of correction is actually the main sector of the "emerging industrial chain" that is currently hotly hyped in the market.

After all, they are a group of stocks in the main sector of the 'emerging industrial chain'.

There is no fundamental support.

Once the hype sentiment begins to ebb, the large number of short-term active capital groups that previously intervened in the speculation will definitely quickly take profits and dump the market.

At the same time, its stock price began to touch the area where historical locked-in shares were deposited.

Those trapped shares that did not find an opportunity to stop loss before, seeing the stock price rise back to the cost price range, I am afraid that when the sentiment recedes, they will be afraid that the stock price will fall again and they will be trapped again, so they will not be able to help but sell in large quantities, right?
In this way, short-term profit-taking and historical trapped positions are jointly suppressed.

In addition, looking at the current market sentiment, it is still difficult to attract a large amount of wait-and-see funds from the outside world to participate.

Moreover, as the over-the-counter property market remains hot and the U.S. is about to enter a period of interest rate hikes, there is not that much incremental funds that can flow into the stock market.

The share prices of related stocks in the "emerging industrial chain" line are at this current level.

It will be difficult to truly stabilize it.

At the very least, a round of violent correction and shock is likely to be inevitable.

And when the main line of the entire "emerging industrial chain" enters the stage of cashing in short-term profit-taking funds, it will enter a stage of violent shock and correction.

I think that for the weighty main-line sectors such as liquor, white appliances, medicine, consumption, electricity, finance, etc. that have already been adjusted in advance, as well as the core main-line sector of "big infrastructure", it is not only not bad news, but it will be a good news.

Because there is no risk of a sharp drop in the overall market, and the Shanghai Composite Index is unlikely to fall below 3000 points again.

The adjustment trend of the main line of 'emerging industrial chain'...

On the contrary, it will release a large amount of active liquidity.

These funds are unlikely to completely take profits and exit the market as there is no major risk in the overall market and the external markets continue to reach new highs.

It will definitely switch to other main lines.

Among the current core themes of the market, only the 'big infrastructure' theme has corresponding gaming cost-effectiveness and has demonstrated strong support.

Therefore, I judge that if the sentiment of the "emerging industrial chain" line declines, a large amount of short-term profit-making funds will flee.

On the contrary, the 'big infrastructure' line will show a certain market trend and a clear upward trend.

Since the next market trend is likely to develop in this direction and idea...

Therefore, in terms of operational strategy, we should not reduce our holdings on the main line of "big infrastructure". Not only should we not reduce our holdings, but we should also continue to increase our holdings while the corresponding leading stocks on the line of "big infrastructure" continue to adjust."

"Continue to increase holdings?" Yu Xiaolu was a little surprised after listening to Lu Xiangxiang's analysis. However, after thinking about it carefully, she felt that Lu Xiangxiang was right. It was just that the current market trend had not yet shown the signal of increasing holdings that Lu Xiangxiang analyzed. "Mr. Lu, I think what you said is probably right, but the current market capital switching between the two main lines is indeed not obvious. Otherwise... let's take a look at the specific situation of the market trend this afternoon?" (End of this chapter)