Rebirth of the Capital Legend

At 9:16 AM, after a brief opening auction, the two stock exchanges presented a clearly divergent opening auction situation in the eyes of countless investors.

The main board's core themes, as well as the most watched "major infrastructure" theme, saw most sectors and concept stocks open higher. Real estate development, construction decoration, and building materials were among the three core sectors, all opening more than 1.2% higher. Meanwhile, the "emerging industry chain" theme, which suffered significant losses yesterday, opened lower across the board. Film and television media, internet software, and internet applications were among the core sectors, opening sharply lower by more than 1.5%, leading the decline among all sectors in the two markets.

As for the core themes, sectors such as liquor, white goods, pharmaceuticals, consumer goods, power, and finance are also relevant.

The opening prices generally showed a slight increase or remained flat.

Similarly, related industry sectors and concept stocks in the two branches of the "emerging industrial chain" – the "smartphone industrial chain" and the "new energy industrial chain" – mostly opened slightly higher, flat, or slightly lower.

Apart from the initial performance of these core thematic sectors and concept sector indices during the pre-market auction.

Regarding popular stocks in both Shanghai and Shenzhen stock exchanges...

As expected, Huaxin Cement, the leading stock with the highest market attention and the most discussion, opened at the daily limit up in the initial auction, just as most investors had anticipated. However, despite the stock opening at the daily limit up, there weren't many buy orders at the limit up price.

At the same time, a number of stocks, such as Tianshan Cement, Beijiang Jiaojian, and Shougang Group, which are closely related to its trend, are also affected.

Most stocks opened 3% to 5% higher than expected, neither exceeding nor falling short of expectations, which was in line with public expectations.

As for 'Oriental Yuhong', it is a core leading stock in the 'major infrastructure' theme dominated by 'Fuxing Road'.

It opened only 1.37% higher.

Compared to the strong opening performance of stocks like Huaxin Cement, Shougang Group, and Tianshan Cement, this stock's performance was relatively weak and fell short of the expectations of most investors holding it.

Aside from the 'major infrastructure' theme, there's also the initial performance of related popular stocks during the pre-market auction.

Yesterday, the 'emerging industrial chain' sector, which suffered the most severe losses, saw a significant drop in the performance of many popular stocks, all of which opened sharply lower.

Among them, "Guangdong Media" was the first stock to hit the daily limit down yesterday due to negative news about share reduction.

At the start of today's opening auction, the stock opened at its daily limit down.

Meanwhile, Huawen Media, which experienced a dramatic reversal from limit up to limit down yesterday, has also hit the limit down price. However, unlike Yue Media, which was locked at the limit down price by tens of thousands of large sell orders, Huawen Media, despite hitting the limit down price, has relatively small sell orders at the limit down price, with less than 8000 sell orders piled up at the limit down price.

In the entire 'emerging industry chain' sector, the stock that has attracted the most attention from investors is 'Huawen Online,' a leading stock in the early stages of the concept.

At this moment, it opened significantly lower, with a drop of 6.22%.

This lower opening is certainly much better than the direct limit-down opening of 'Guangdong Media' and 'Huawen Media'.

However, for those who hold this stock, or those who bought it yesterday and are now stuck with losses...

This significant drop at the open was clearly below everyone's expectations.

Besides these core hot stocks, other popular heavyweight stocks in the "emerging industrial chain" sector, such as "LeTV", "Tonghuashun", "Eastmoney", "Netspeed Technology", and "All-China Education", also opened significantly lower, with the decline being significantly greater than the corresponding sector index performance.

In particular, the stock 'All-Tong Education' opened 5% lower, causing the related 'Online Education' concept sector to open 3.21% lower, leading the decline among all concept sectors in both markets.

"As expected, most of the industry sectors and concept sectors related to the 'major infrastructure' theme, as well as the corresponding popular concept stocks and industry heavyweight leading stocks, opened higher due to the momentum of yesterday's market performance and the influence of post-market sentiment." Li Jinshi remarked in the "Fushan Group" group of major speculative investors upon seeing the initial opening auction of the two markets. "Meanwhile, the industry sectors and concept sectors related to the 'emerging industrial chain' theme, which showed a significant loss-making effect yesterday, almost all opened sharply lower. Among them, 'Guangdong Media' and 'Huawen Media' even opened at the daily limit down."

Based on this opening situation, it's clear that a large amount of active capital in the market has indeed concentrated on the 'major infrastructure' sector.

Furthermore, the large number of investors who followed the trend of buying into the "emerging industrial chain" theme yesterday have all opted to cut their losses today, instead of trying to maintain the market and guide the investment sentiment of the "emerging industrial chain" theme in a positive direction.

Furthermore, consider the main weighting trends of the main board...

This refers to the opening performance of the liquor, white goods, pharmaceutical, consumer goods, power, and financial sectors.

There are also other related industry sectors and concept sectors that do not have obvious negative factors at the opening.

It seems that the continued record highs in overseas markets last night did not have a strong emotional impact on these leading sectors and concept stocks.

The opening performance of these main theme sectors and industry sectors was mostly below expectations.

Meanwhile, with the main themes of "major infrastructure" and "emerging industrial chains" moving in opposite directions, the overall bullish sentiment in the market seems insufficient, and the divergence between bulls and bears remains significant.

Overall, the initial auction price seems somewhat lower than expected!

“Yes, I feel the same way.” Hearing Li Jinshi’s remark, Chen Guiyun nodded and replied, “Overall, considering the record highs in overseas markets last night and the emotional feedback effect revealed by the heated discussions among investors across the internet last night, the two markets today, apart from the film and television media, internet software, and internet application sectors in the ‘emerging industry chain’ main area, should have opened significantly higher. But now… it’s clearly contrary to the situation. This indicates that the actual buying power and upward momentum in the market are lower than expected and somewhat insufficient.”

The market indicators suggest that the upward momentum is currently insufficient.

Furthermore, there is some disagreement between the bulls and bears. Therefore, I think we may need to lower our expectations for the market's subsequent performance today and be prepared for the market to continue its sideways consolidation.

However, the overall market opening situation did not quite match the market sentiment feedback.

However, regarding the performance of individual stocks...

The fact that 'Huaxin Cement' opened at its daily limit up was somewhat beyond expectations.

Furthermore, most active funds in the market are quite proactive in following the "major infrastructure" theme and choosing to follow the strong performance of core concept stocks in this theme from yesterday.

I think this trend, as well as the initial opening auction performance of the 'major infrastructure' sector, are factors to consider.

The "major infrastructure" theme will likely continue to attract a large number of active funds to participate today, and the market is likely to continue to rise.

We can be quite optimistic about this line.

As for the 'emerging industrial chain' sector, which stands in stark contrast, since a large number of short-term funds that bought into this sector yesterday have already chosen to cut their losses and exit, we don't need to pay too much attention to it.

Since both "Huawen Media" and "Yue Media" opened at their daily limit down in the initial stage of the call auction, it indicates that the core sectors within the "emerging industry chain"—film and television media, internet software, and internet applications—will likely continue to see selling pressure from existing funds today, with many short-term retail investors cutting their losses. The negative feedback is expected to be significant.

"I don't think so." After listening to Chen Guiyun's analysis, Liao Guoxiang pondered for a moment and said, "Looking at the initial opening auction trend of 'Huawen Online' stock, it seems that the stock showed relatively strong resistance despite the significant gap down at the open."

Everyone expected this stock to likely open at its daily limit down.

Surprisingly, this check held up despite the fact that both 'Guangdong Media' and 'Huawen Media' stocks opened at their daily limit down.

Look at the number of matched orders currently on the trading screen.

It is evident that despite the immense selling pressure on this stock, there was still a considerable amount of buying interest despite the significant gap down at the open.

And what about the US market performance last night...?

The real driving force behind the continued record highs in US stocks is actually a group of technology giants.

In other words, the main driving force behind the US stock market bull run is still the technology sector.

Since the US stock market continues to reach new historical highs, driven by the technology sector, I think many smart money in the market must have noticed this.

In other words, in reality...

The technology sector in the market still has some positive support.

Meanwhile, the continued rise in the market valuations of a host of tech giants in overseas markets is also beneficial to the valuation of corresponding tech stocks in the Hong Kong and A-share markets.

Of course, the performance, business environment, and future prospects of foreign tech giants are all factors to consider.

It definitely far exceeds the performance of corresponding technology stocks in the domestic market.

Even with the significant gap between the two, and even though many technology stocks in the 'emerging industry chain' sectors of the A-share market currently offer no value for money in terms of fundamentals, have an unclear future, and lack any certainty about the future, this will not affect the fermentation of positive sentiment or the opportunity for short-term speculation.

"Old Liao, are you saying that there's a high probability the 'emerging industrial chain' sector will reverse today?" Hearing Liao Guoxiang's analysis, Li Jinshi was slightly surprised and said, "It seems unlikely, doesn't it? Looking at the opening auction, the 'emerging industrial chain' sector has clearly collapsed across the board. Basically, all the funds that bought into this sector yesterday are now cutting their losses. Meanwhile, in the core sectors and concept stocks within the 'major infrastructure' sector, the buying interest is gradually increasing across many popular stocks. Under these circumstances… it seems unlikely that speculative short-term funds will flow back into the 'emerging industrial chain' sector. Moreover, the current shareholding structure in the 'emerging industrial chain' sector doesn't support a large influx of short-term funds, does it?"

Any market reversal, or rather, a market bottoming out and rebound.

All of these require substantial funds to undertake.

Since the "major infrastructure" sector is still siphoning potential buying interest from other main sectors in the market, and it seems unlikely that institutional investors in the main sectors such as liquor, white goods, pharmaceuticals, consumer goods, power, and finance on the main board would adjust their portfolios to buy stocks related to the "emerging industrial chain" sector at this time.

In other words, the 'emerging industrial chain' is a mixed bag.

At this moment, there aren't actually that many potential buyers in the market to absorb the demand.

Without potential buyers within the market, the only way for the market to reverse is to rely on incremental funds from outside the market. However, there are no obvious signs of incremental funds entering the market at this moment, so this path seems unlikely to work.

In short, based on the current market trend, I see no signs of a reversal in the 'emerging industrial chain' sector today.

“I also think it will be difficult for the ‘emerging industrial chain’ sector to bottom out and rebound today,” Chen Guiyun added. “Indeed, the record highs in overseas markets last night were driven by a number of tech giants, but this so-called positive news is far from enough for the domestic market-making funds to trigger a reversal in the ‘emerging industrial chain’ sector and create another wave of ‘tech sector’ rally. Moreover, the ‘major infrastructure’ sector, after forming a bullish effect, is still siphoning potential buying interest from other main market sectors.”

"The market performance at this moment is indeed not very clear," Liao Guoxiang acknowledged Chen Guiyun's point. He paused, then continued, "I'm only analyzing the initial resistance shown by the stock 'Huawen Online,' as well as the 'new energy industry chain' and 'smartphone industry chain' sectors during the pre-market auction. My analysis suggests that the market will likely continue its oscillating pattern and the rotation of main themes. I believe the 'emerging industry chain' sector might see a bottoming-out rebound. Whether this will actually happen depends on further market performance, the completion of the pre-market auction, or confirmation during the trading session. Of course... regardless of how the various internal main themes switch, the index at this level is unlikely to rise or fall significantly. There's little risk of a sharp drop, but a sharp rise is also unlikely." (End of Chapter)