Rebirth of the Capital Legend

"Since the risk of a sharp drop in the index is small, and the probability of continued fluctuation is higher, is the risk of further sharp declines also low for the core concept stocks in the three core sectors of 'emerging industrial chains'—film and television media, internet software, and internet applications—which have already seen significant corrections?" As the market's pre-market auction continued, He Chong pondered for a moment and said, "If that's the case, it feels like there's no need to rush to cut losses at this point, given that the bearish sentiment in the market has already been fully priced in!"

"Yes, I think Lao He, you should wait until a large number of stop-loss orders are placed in the 'Emerging Industrial Chains' sector, and the market sentiment has been completely vented. After that, when bargain hunters come in and many stocks form an oversold rebound, it would be better to reduce your holdings or liquidate your positions to cut losses during the rebound," Zheng Jinming added. "At this point, the short-selling sentiment in the entire 'Emerging Industrial Chains' sector has been fully vented. 'Guangdong Media' and 'Huawen Media' have been hammered down to their daily limit, and 'Huawen Online' is also close to its daily limit. At this point, it would be better to..." Following the release of bearish sentiment and selling off to cut losses is completely unnecessary. Indeed, today's "major infrastructure" sector saw an overly uniform sentiment response during the pre-market auction, with opening expectations set too high. This will clearly limit the continued buying by other funds that are optimistic about this sector but hesitant due to high prices and risk aversion. If the "major infrastructure" sector cannot achieve significant upward movement given the overly uniform opening expectations, I feel that the "emerging industrial chain" sector, which has already exhausted its bearish sentiment, will likely face a difficult situation today.

There will still be a lot of funds available for bottom-fishing speculation.

At least in the current situation, I think the 'emerging industrial chain' approach, compared to the 'major infrastructure' approach, offers better short-term speculative value and a greater expectation gap.

"Well, what Lao Zheng said makes sense." At this moment, Lao Qian also responded, "Given that the index is likely to remain volatile, it is indeed unlikely that the 'major infrastructure' sector will continue to rise independently and reach a certain level of potential, given such strong consensus expectations."

Meanwhile, this is compared to the core theme of 'major infrastructure'.

Other sectors on the main board include liquor, white goods, pharmaceuticals, power, consumer goods, and finance.

Currently, the 'emerging industrial chain' sector is still at a relatively low level. Many small and medium-sized stocks in this sector have not even rebounded by 10% from their previous lows, which is significantly lower than the overall market's rebound. It can be considered a current market trough.

Also, the trends of the ChiNext Index, Huazheng 500 Index, and CSI 1000 Index.

Currently, the major indices are still showing a clear bullish trend, and their direction has not changed significantly.

Since the ChiNext Index, Huazheng 500 Index, and CSI 1000 Index are still in a clear bullish trend.

The main theme of 'emerging industrial chains' is highly correlated with the trends of these major indices.

It's unlikely that it will simply fall back down like this. I estimate that once the bearish sentiment in the 'emerging industrial chain' sector has subsided, this core theme will likely see a reversal and a chance to rise again. Even, if... the subsequent sentiment feedback is positive, a second wave of rebound is not impossible.

"It feels like the overall market trend has been quite chaotic recently," Zhang Xinlei said. "The various funds in the market, including speculative funds, retail investors, and institutions, seem to have disagreements about which main theme to focus on, and it seems that no matter which main theme it is, the logical expectation to support its continued upward trend is somewhat lacking."

For the main board sector, let's focus on liquor, white goods, pharmaceuticals, consumer goods, power, and finance.

The excessive concentration of institutional investors in the market prematurely priced in this year's performance expectations. At the same time, the stock prices of many industry leaders have also risen to a relatively high level. Without subsequent expectations to catch up and without the performance of many industry leaders exceeding expectations, it is indeed difficult to continue to expand upwards.

However, at the same time, this is also due to the leading stocks in related industries within these main sectors.

There are still good future prospects, and the company's performance is still in a relatively good cycle.

Therefore, the major institutional investors who hold these core leading stocks in these industry sectors will not reduce their positions, take profits, or exit the market on a large scale at this point, or make large-scale portfolio adjustments.

Insufficient future expectations and the fact that performance targets are not yet met have led to institutional hesitation.

The large number of retail investors who followed suit also felt that the investment at this point was not cost-effective.

This naturally led to a situation where defensive sectors on the main board, such as liquor, white goods, pharmaceuticals, consumer goods, power, and finance, could neither rise nor fall significantly.

Currently, the main theme that investors are focusing on is 'major infrastructure'.

Based on current expectations, it is indeed the strongest theme among all the core themes in the market right now.

It cannot be denied that sectors such as real estate, construction and decoration, building materials, non-ferrous metals, steel, and coal in this main theme have seen many stocks rise to a certain high level after nearly two months of continuous growth. Compared with their bottom positions, most of them have already doubled in value.

In this trend, the amount of profit-taking funds within the market is quite substantial.

Moreover, many stocks along this line are currently located at the central position of historical trapped positions.

In other words, in the entire "major infrastructure" sector, the internal shareholding structure of many stocks is still quite chaotic and has not been fully settled.

It contains both profitable positions and historically trapped positions.

At this point, there is a certain degree of disagreement between bulls and bears.

Some remain optimistic, while others believe the stock price has already met expectations and is unlikely to continue rising.

Given the significant divergence between bulls and bears, even if funds in the market temporarily concentrate on this line, continuous volume is needed for it to rise further.

However, market liquidity is indeed quite limited at present.

It simply doesn't support large-scale production.

Therefore, unless market liquidity improves further, the "major infrastructure" sector is unlikely to see much further growth.

In other words, this line is more likely to remain in a sideways or oscillating pattern.

Since the main board sectors of liquor, white goods, pharmaceuticals, consumer goods, power, and finance, as well as the real estate, construction and decoration, building materials, non-ferrous metals, steel, and coal sectors in the "major infrastructure" theme, are not likely to continue to break through at the current position and at the current time point, after comprehensive analysis, it is clear that they do not have the potential to continue to break through at the current position and at the current time point.

Therefore, the best room for speculation in the market is in the areas with the greatest potential for expectation gap.

That leaves only small- and mid-cap stocks that are strongly correlated with the ChiNext, Huazheng 500 Index, and CSI 1000 Index.

Although there are currently many small and mid-cap stocks and micro-cap stocks in the market.

There isn't any particularly strong underlying logic.

There are no particularly significant policy directions to drive this.

However, the advantage lies in the low price level, and the fact that speculating on these stocks does not require a large amount of capital. At the same time, there are enough stocks, various sub-sectors and concept sectors, and enough ghost stories to tell.

So, I think...

Once these major institutional investors encounter significant resistance in their concentrated buying spree in the "major infrastructure" theme, as well as in sectors like liquor, white goods, pharmaceuticals, power, consumer goods, and finance on the main board, the numerous short-term funds chasing these core, popular stocks will likely quickly shift their focus to "emerging industry chains"—sectors that are relatively low-priced and face less selling pressure.

Of course, this is in the context of the major core indices failing to break through in the short term.

Short-term funds in the market will return to the 'emerging industrial chain' sector for further speculation, but the upside potential will not be too great, and the duration will not be too long.

Therefore, once there is a rebound, it's essential to take profits when they're available.

At this stage, I think the most suitable trading strategy is still to buy low and sell high.

"For the stocks I hold, selling when they've risen too much and buying when they've fallen too much is a pretty safe bet. The chances of selling too early or buying at the halfway point of a decline seem quite small."

“Yes, the strategy of buying low and selling high is indeed the most suitable for the current market situation.” Zheng Jinming nodded. “If the index can’t break through, individual stocks can’t fly too high, and of course, they can’t fall too much either.”

"Since that's the case, I'll take another look." During the discussion, He Zhong noticed that the market's opening auction time had already reached 9:24, almost the end of the opening auction. After thinking for a while, he decided not to rush to place a stop-loss order and said, "At worst, it will continue to fall by one limit down. I don't believe that without the influence of major negative news, it can directly fall back to the starting point of the rise."

In his response...

As soon as he finished speaking, the clock struck 9:25, and the opening auction for both Shanghai and Shenzhen stock exchanges ended.

After a ten-minute pre-market auction, the market opened slightly higher: the Shanghai Composite Index by 0.21%, the ChiNext Index by 0.29%, and the A50 Index, benefiting from the significant opening gains in various sectors related to the "major infrastructure" theme and leading stocks in corresponding core industries, opened at a 0.49% increase.

As for the ChiNext Index, Huazheng 500 Index, and All-China 1000 Index.

All of them opened lower.

Among them, the ChiNext Index opened down 0.89%, while the Huazheng 500 Index and the All-China 1000 Index both opened down about 0.6%.

The opening situations of the major indices were different.

The performance of major themes that market investors are closely watching...

Most of the major sectors and indices on the main board, including liquor, white goods, pharmaceuticals, consumer goods, power, and finance, opened flat. Among them, liquor and white goods sectors opened slightly higher, leading the gains among the major sectors.

In the "major infrastructure" sector, related sectors such as real estate, construction and decoration, building materials, non-ferrous metals, steel, and coal generally opened higher due to the active buying by numerous follow-up funds during the pre-market auction. Among them, the real estate, construction and decoration, and building materials sectors all showed significant opening gains.

In particular, the real estate sector and the cement concept sector opened higher, with gains exceeding 1.2%.

In the "emerging industry chain" sector, related sectors such as film and television media, internet software, internet applications, and electronic information all opened lower. Among them, the indices of film and television media, internet software, and internet applications all opened lower by more than 1.5%, leading the decline among all industry sectors in the two markets.

As for the two related main lines, the 'smartphone industry chain' and the 'new energy industry chain', and their corresponding industry sectors.

Similar to the performance of the main board's weighted sectors, they all opened flat or slightly higher, in line with the performance of the Shenzhen and Shanghai indices.

Besides the performance of these main market sectors...

Regarding the performance of popular stocks related to core concepts that have garnered significant attention from a broad range of investors in the market.

The most watched stock, 'Huaxin Cement', maintained its limit-up opening despite a surge in trading volume during the pre-market auction. The pre-market auction saw a total transaction volume of 1.1 million yuan, and the limit-up buy orders at the open amounted to approximately 1.23 lots.

But no matter how many buy orders are placed at the daily limit.

The fact that this stock opened at its daily limit up is already beyond everyone's expectations.

Popular stocks that followed the trend of Huaxin Cement, such as Tianshan Cement, Beijiang Jiaojian, Shougang Group, and Financial Street, opened higher, with gains ranging from 5% to 8%. Compared to other popular stocks in the market, this opening performance still exceeded the expectations of most investors.

Another stock that has garnered significant attention and is also a popular stock in the "major infrastructure" sector is "Oriental Yuhong".

Today's opening price was somewhat below everyone's expectations.

The stock opened only 1.19% higher, and the trading volume was low throughout the opening auction.

Among the many popular stocks in the "major infrastructure" sector that opened high, the most striking contrast is naturally the group of popular stocks in the "emerging industrial chain" sector.

Within the main area of ​​'emerging industrial chains'...

Several popular stocks that have garnered significant attention.

The stock 'Huawen Online' opened 9.23% lower, almost hitting the daily limit down, and saw a surge in trading volume during the pre-market session, with 1.59 million yuan traded.

Both Huawen Media and Yue Media opened at their daily limit down with reduced trading volume.

Stocks heavily weighted in the ChiNext index, such as LeTV, Netspeed Technology, Maruda Film & Television, and Quantong Education, all opened lower, ranging from 1% to 3%.

We can see the opening performance of major market indices, key sectors, and popular stocks.

Many investors across the internet are somewhat disappointed.

After all, last night, overseas markets, especially US stocks, saw a surge to new historical highs, leading to high expectations for today's market performance before the market opened.

However, the Shanghai Composite Index opened almost flat, and the ChiNext Index opened significantly lower.

Many investors felt their illusions shattered, their hopes plummeting instantly. (End of Chapter)