Rebirth of the Capital Legend

"With the price hitting the limit up at this point, it's unlikely that 'Huawen Online' will be able to recover and close at the limit up in the final minutes of trading." Noticing the sharp drop across all sectors and concept stocks related to the hot "emerging industry chain" theme, and also noticing that hundreds of thousands of buy orders for 'Huawen Online,' a core leading stock in both Shanghai and Shenzhen stock exchanges, were quickly sold off by panic selling within minutes, Zhang Wei was somewhat surprised. He continued, "Indeed... the resistance of five consecutive limit ups isn't so easy to break through. If this stock can't recover and close at the limit up in the final minutes, its future looks bleak. Tomorrow, it will most likely open significantly lower, or even at the limit down."

“The trading volume exploded by 5 million in ten minutes. With this kind of selling pressure, it’s basically impossible for the price to fall back to the limit.” Liang Jiucheng, who was also closely watching the market changes, continued, “I said before that the ‘emerging industrial chain’ sector lacks the most core underlying logic support. Once the short-term profit-taking pressure in the market forms a consistent expectation of selling, the market will turn around very quickly.”

“Yes!” Zhang Wei said, “If ‘Huawen Online’ could hold its position and not crash, then there would still be a chance for the ‘Emerging Industrial Chain’ sector to recover. Now that ‘Huawen Online’ has crashed with a large volume of trading, the profit-taking pressure within the ‘Emerging Industrial Chain’ sector will quickly become unified, and once the sentiment collapses, it will be very difficult to recover.”

"Judging from the situation..." Zhao Zhiyuan's gaze quickly fell on the 'major infrastructure' theme, and then he said, "The large number of short-term profit-taking funds gathered in the 'emerging industrial chain' theme have shown signs of switching to the 'major infrastructure' theme after selling off their related shares. And it's not just the 'major infrastructure' theme; there are also signs of a large inflow of buying funds in the main board's heavyweight sectors such as liquor, white goods, pharmaceuticals, consumer goods, power, and finance."

“This is normal,” Liang Jiucheng said. “When the sentiment in the ‘emerging industrial chain’ sector collapses, short-term speculative sentiment in the market will inevitably decline, and the risks of short-term speculation will also rise rapidly. This will inevitably drive up the risk aversion sentiment in the market, causing a large amount of funds to flow into the safe-haven sector.”

“That’s right,” Zhang Wei said. “But the ‘Huaxin Cement’ stock really bucked the trend.”

"Yes, this stock is behaving very strangely." Zhao Zhiyuan said, his gaze falling on the 'Huaxin Cement' stock. "Almost all the small and mid-cap stocks in the market have collapsed, but this stock has actually risen against the trend from the depths of despair, and judging from the situation... it seems to have the desire to hit the daily limit!"

“Looking at the fund flow of this stock, the net inflow of major funds has exceeded 1500 million,” Zhang Wei said. “This stock might actually become a new short-term leading stock in the ‘major infrastructure’ sector, with funds clustering together for speculation. I’m thinking… should I buy some shares at this price?”

“I feel it’s a good buy,” Zhao Zhiyuan said. “The stock ‘Huawen Online’ has seen a massive sell-off and its price has hit the limit up, so the hype should be over. Considering the current attention, popularity, and main capital flow and market performance of ‘Huaxin Cement’, it has the potential to rival ‘Huawen Online’ and become the leading stock in the new concept sector in both markets. Moreover, the ‘major infrastructure’ theme does have strong underlying logic. I feel that if a large number of short-term profit-taking funds that have been concentrated in the ‘emerging industrial chain’ sector shift their positions back to the ‘major infrastructure’ theme for further speculation, this stock will have enough room for a rebound and speculation expectations.”

“Before it hits the daily limit, the certainty isn’t enough,” Liang Jiucheng pondered for a moment and said. “The point of certainty should be when this stock, against the backdrop of a sharp drop in the ‘emerging industrial chain’ sector, strongly moves upward and locks in the daily limit. However, it’s hard to say whether this stock can achieve the daily limit in the last half hour of trading. After all, the sharp drop in the ‘emerging industrial chain’ sector and the consistent profit-taking by short-term investors will not only severely dampen the bullish sentiment in the ‘emerging industrial chain’ sector, but also suppress the bullish sentiment in the entire market.”

In this situation, with the stock of 'Huaxin Cement' having already rebounded by more than 7 percentage points from its previous lows.

Then, take over at a higher position and actively try to seal the board.

I'm afraid there aren't many funds in the market with that kind of vision, or rather, those willing to operate so aggressively.

"Old Liang, are you interested in lighting a fire?" Zhang Wei chuckled and said, "'Huaxin Cement' isn't a particularly large stock, with a circulating supply of around 40 billion. Based on its historical trading volume, there are probably only about 2 million shares still available right now."

In other words, at most another 2 million shares will be traded, and then there will be little selling pressure.

"With a volume of 2 million, 2000 million would probably be enough to ignite the price. Lao Liang, you have the capability. If you're willing to trade this stock, I can add fuel to the fire at the daily limit."

"Forget it, forget it," Liang Jiucheng replied with a smile. "In the 'emerging industrial chain' sector, the selling pressure from a large amount of short-term profit-taking is having a significant impact on the overall market sentiment. Going against the trend at this time is quite risky. I'll wait for other funds to ignite the market. If it can hit the limit up, I'll contribute some funds. If it can't, I'll observe the market sentiment after the close and the opening auction tomorrow before making a decision. However... even if 'Huaxin Cement' can't hit the limit up today, it's expected to outperform 'Huawen Online' given its strong performance today."

“Yes, it’s better to wait for the opportunity on the right side.” Zhao Zhiyuan nodded and said, “Right now, the priority should be to sell off the profits from the ‘emerging industry chain’ sector.”

"Has Old Zhao thrown them all away?" Zhang Wei asked.

Zhao Zhiyuan continued, "I've sold all the shares of 'Huawen Online,' 'Quantong Education,' and 'Huawen Media,' but I still have a small position in 'LeTV.' I have a feeling that there will still be opportunities in the 'growth stock' sector in the market."

“I’ve basically sold off all the remaining shares of stocks related to the ‘emerging industrial chain’ theme,” Zhang Wei said. “The rebound from oversold conditions can’t keep up with the fundamentals-driven themes. The ‘major infrastructure’ theme is undeniably strong, and its shareholding structure is very stable.”

“That’s right,” Zhao Zhiyuan said. “Dongfang Yuhong, this stock, didn’t even reach the 20-day moving average in this round of adjustment. Now the market sentiment is slowly returning to the ‘major infrastructure’ theme. I feel that this core leading stock is likely to touch the previous high again.”

"The stock 'Oriental Yuhong,' backed by the 'Fuxing Road' investment, does indeed show a different trend compared to other leading stocks in the 'major infrastructure' sector," Liang Jiucheng said. "However, at this position, continuing to buy this stock isn't very cost-effective; it's only relatively safe."

“I feel like there’s still a lot of upside potential for ‘Oriental Yuhong’,” Zhang Wei said. “Looking at the opinions of many major market institutions, they’ve already projected a market capitalization of 1000 billion and a profit of 50 billion for this stock.”

"Isn't this a bit of an exaggeration?" Zhao Zhiyuan said.

Zhang Wei pondered for a moment and responded, "If the real estate industry continues to be booming, it's not impossible. And this boom cycle in the real estate industry doesn't seem likely to cool down significantly in less than two or three years. I think the institutions' expectations for the future of 'Oriental Yuhong' are not exaggerated."

“It’s hard to say for sure in the long term, let’s look at the short term,” Liang Jiucheng said. “In my opinion, the sure point to buy ‘Oriental Yuhong’ should be the moment it breaks through to a new high. Right now, the certainty is not enough, but at the same time, even if the overall market sentiment deteriorates, the stock probably won’t fall too much. In terms of holding safety, it is indeed still very safe.”

“Yes, I think so too.” Zhao Zhiyuan nodded. “In terms of the current cost-effectiveness of speculation, it is indeed better to gamble on Huaxin Cement than to take on the ‘Oriental Yuhong’ stock.”

After saying that, without waiting for Zhang Wei and Liang Jiucheng's response, he immediately turned his attention back to the 'Huaxin Cement' stock and began to trade in advance, placing many buy orders on the stock at market price.

Compared to opportunities on the right side, he prefers trading on the left side.

They are more willing to take certain risks in order to obtain relatively higher profits.

As his gaze returned and he secretly placed an order, during a brief exchange among the three core speculative investors in the "Qilu Gang Main Speculative Investors Group"...

The market trading time has now quickly moved into 2:35 PM.

Across the two stock exchanges, the core theme of "emerging industrial chains" has seen its previously leading sectors—film and television media, internet software, and internet applications—fall into negative territory, completely exiting the ranks of the top-performing sectors in both markets.

Regarding the leading stocks in the corresponding core concepts...

Stocks such as 'Quantong Education', 'Yue Media', and 'Huace Film & Television' have already fallen by more than 6%. Core heavyweight stocks such as 'Huawen Media', 'LeTV', and 'Wanda Film & Television' have also fallen by about 3% at this moment, with intraday pullbacks of more than 7% from their highs.

Among them, 'Chinese Online' is still attracting a lot of market attention and is the subject of intense discussion among investors.

It has fallen from the daily limit up to a 6.23% gain, and the market data shows that the main funds flow has shown a significant net outflow during the day.

In addition to the core sectors of film and television media, internet software, and internet applications.

The "electronic information" sector, which is the main area of ​​the "emerging industrial chain," as well as the two major sub-sectors of the "smartphone industrial chain" and the "new energy industrial chain," are all currently showing a downward trend. However, the decline in the indices of these sectors and concepts is not as severe as that of the film and television media, internet software, and internet application sectors.

Furthermore, it was affected by the across-the-board plunge in industry sectors and concept stocks related to the 'emerging industrial chain' theme.

At this moment, the ChiNext Index, SME Index, and Huazheng 500 Index have all shifted from an upward trend to a comprehensive downward trend.

Among them, the ChiNext index has fallen by about 0.5%.

The declines in the SME Board Index and the Huazheng 500 Index were even greater, approaching a 1% drop.

Aside from the 'emerging industry chain' theme, which suffered a sharp sell-off by short-term profit-takers and a rapid decline in bullish sentiment, burying the large amount of buying capital that had been absorbed during the day, the other two core themes of the market, the 'major infrastructure' theme and the main board sectors such as liquor, white goods, pharmaceuticals, consumer goods, power, and finance, remained relatively stable. Most stocks maintained a sideways trend or a slight upward trend against the market.

Another sector is agriculture and animal husbandry, which have always been relatively unpopular.

In the midst of this market plunge, it has instantly become a safe haven for funds within the market.

The corresponding industry sector indices, concept sector indices, and concept stocks and constituent stocks with a certain degree of market recognition and discussion.

Most of them also showed a clear upward trend due to the influx of buying funds seeking safe haven.

It even maintained its leading position in both markets.

Amidst the turbulent final trading session, the total number of stocks closing in positive territory on both the Shanghai and Shenzhen stock exchanges has fallen from a peak of nearly 2200 in the morning to just over 800 currently.

"Sigh... it seems like 'Huawen Online' is truly finished." Seeing the market's main capital flow rapidly changing, and the market trend clearly shifting, the entire 'emerging industry chain' was completely engulfed in a situation of rampant short selling, with countless long positions being dumped in a stampede. At this moment, He Zhong, in the 'Suzhou-based' major speculative capital group, couldn't help but sigh deeply and say, "I really shouldn't have been greedy for that little profit at the beginning of the morning, I really shouldn't have continued to increase my holdings in 'Huawen Online'. Now... I can't even run away."

"Who would have thought this would happen at the end of the day?" Hearing He Zhong's sigh, Zhang Xinlei, who had also added a lot of shares in the 'emerging industry chain' theme during the day, said helplessly, "Old He, your main position is still in 'Huawen Online'. Generally speaking, on the second day after a leading stock's decline, funds often flow back, creating a secondary high point and then inducing another wave of selling, meaning there's still a safe exit point. But my main position is in 'Huawen Media'. Compared to the trend of 'Huawen Online,' 'Huawen Media,' as a follower stock, doesn't necessarily have a chance to recover the next day. I'm really in a bad situation. I can't even get out. It's really unexpected that the 'emerging industry chain' theme, which didn't rise much this time and didn't have any clear negative news, would experience such a sharp drop due to profit-taking. Many related concept stocks have dropped by more than 7% in the past half hour. The large amount of funds that were absorbed during the day are suffering significant losses."

"The group of funds that bought into the 'emerging industrial chains' theme today are all wiped out, judging from the current market trend," Old Qian in the group said. "It's really tragic. Even though the overall market didn't fall much, the intraday losses were massive. I originally thought that even if the 'emerging industrial chains' theme corrected, the pullback would be quite gentle, but I didn't expect... the difference compared to the 'major infrastructure' theme is so huge." (End of Chapter)