Rebirth of the Capital Legend

"The main focus is still on the 'new energy industry chain' sector. It didn't rise much in the early stages, and before today's collective surge, it was in a state of continuous low-volume consolidation. The internal floating shares have already been fully settled, so it's not fair to say that the shareholding structure of this sub-sector is stable," Lao Zhang said. "I think that for the 'new energy industry chain' sub-sector to achieve sustained momentum, it needs to undergo a test of increased volume and a period of divergence before it can be confirmed. Meanwhile, the constituent stocks and concept stocks in the film and television media, internet software, and internet applications sectors..."

The internal bargaining mechanism has already been established...

The previous major divergence has largely been digested, and as long as market sentiment supports it, the upward pressure will not be significant.

There are also three major sectors under the 'major infrastructure' theme: real estate, architectural decoration, and building materials.

The internal shareholding structure of these three major sectors has actually been settled after sufficient turnover. In terms of shareholding structure, these major sub-sectors seem to be better than the 'new energy industry chain' sector.
However, given the current positive sentiment and news,

The "new energy industry chain" is a relatively advantageous sector, significantly stronger than the core sub-sectors of real estate, construction and decoration, building materials, film and television media, internet software, and internet applications.

"The relatively low price, coupled with the advantages of sentiment and news, is the core factor for the concerted speculation by funds, isn't it?" Lao Wu said. "Given such strong sentiment and news stimulation, there's no reason not to invest in the 'new energy industry chain' if expectations haven't been fully realized."

The factor that previously suppressed the 'new energy industry chain' was the rumored reduction in subsidies next year.

Now, this negative factor that suppressed the rise of the 'new energy industry chain' has been completely removed.

So, assuming the subsidies are not reduced.

Let's take a look at the future development and corresponding expectations of the 'new energy industry chain'.

Then we can value it based on the original, more optimistic scenario.

In other words, the fundamentals of the 'new energy industry chain' have improved significantly after the major positive news was released this afternoon.

We cannot look at this side line based on the previous fundamental situation.

We should view this from a developmental perspective.

From a developmental perspective, there is no doubt that the fundamental improvement of the 'new energy industry chain' and the explosive growth in demand for the entire industry will be significantly better than other sub-sectors within the main 'emerging industry chain' sector.

Given the positive outlook for the future, there is a possibility of a large-scale surge in demand across the entire industry.

Moreover, the entire industry is a booming sunrise industry with many opportunities.

At the same time, the government also provides sufficient subsidies to support this effort.

Then there's no reason not to be optimistic about this sector, especially since... due to previous rumors about subsidy reductions, the valuation of the entire 'new energy industry chain' is currently suppressed to a relatively low level.

Relatively low valuation, excellent future prospects, rapidly changing fundamentals...

These factors exist.

There's no reason why major institutional investors and other active short-term funds wouldn't concentrate on this sector for speculation.

In fact, after the market opened this afternoon...

Despite the direct positive stimulus to the 'new energy industry chain'.

However, its trend undoubtedly makes it the strongest sector among all the popular sub-sectors in the entire market. Many leading stocks in core industries saw their share prices surge to the daily limit almost immediately after the afternoon opening, with trading volume dropping significantly.

“I think Lao Wu makes sense,” Xu Qiao replied. “Overall, the ‘new energy industry chain’ does indeed have the highest risk-reward ratio at present. As for the ‘major infrastructure’ sector, the fundamentals are still improving, the national real estate market is still hot, and housing prices are still rising steadily.”

However, these expectations are basically already within everyone's consideration.

That is to say...

Whether from the perspective of news or sentiment, there are currently no particularly unexpected developments in the entire "major infrastructure" sector.

Since nothing particularly unexpected happened.

The stock price will naturally follow the fundamentals.

As for the sub-sectors of film and television media, internet software, and internet applications, their fundamentals are poor and there are no signs of a reversal, so their upward trend cannot be supported by fundamentals.

Judging from the previous speculation and motives of various funds in these sub-sectors.

Most of the funds in the market view the speculation in these three sub-sectors as a rebound from oversold conditions.

Since this is a rebound after a sharp drop, these three supporting themes are bound to be less sustainable and have less room for further speculation.

Originally, this was the 'new energy industry chain' line.

Given the widespread rumors in the market that subsidies would be phased out next year, and the fact that many companies in the industry were said to be surviving by fraudulently obtaining subsidies, the future outlook was not good, and the industry's fundamentals were also quite poor.

Therefore, the overall valuation of the 'new energy industry chain' sub-sector was previously compressed quite drastically.

but now……

Given that the government has clearly stated that the subsidy policy will not be reduced next year.

With the government clearly stating that it will increase its investment in new energy in the future.

The fundamentals of the 'new energy industry chain' have improved significantly, and the prospects and expectations for the entire industry are clearly different from before.

When the fundamentals, future expectations, and future development potential of the industry have all undergone drastic changes.

Therefore, I think it's only natural that its overall valuation would rebound.

Old Wu is right in this regard. I also think that the 'new energy industry chain' is currently very worthy of attention and will most likely become the strongest sub-sector in the market in the near future.

Of course, in addition to the sub-sectors that have received high market attention, such as real estate, construction and decoration, building materials, film and television media, internet software, and internet applications, there is also the 'new energy industry chain' sub-sector, which saw a concentrated surge today and almost saw a collective limit-up.

In fact, the 'smartphone industry chain' sub-sector is currently attracting considerable attention in the market.

Due to Apple's new product launch event in September, the entire 'smartphone supply chain' sector, especially 'Apple concept' related stocks, is currently experiencing very high expectations.

Many investors are clearly looking forward to Apple's new product launch event in September.

I think these are all worth paying attention to, and we can see how the major funds in the market choose to move in the next day.

We should never make subjective assumptions, no matter what.

Just look at where the market's funds are going, and follow the market, right?

If various market funds concentrate on the 'new energy industry chain' sector as the main direction for the market's continued upward movement, then we can quickly follow suit. If tomorrow, sectors such as 'real estate,' 'construction and decoration,' 'building materials,' 'film and television media,' 'internet software,' and 'internet applications' become the focus of active funds and institutional investors, then we can also concentrate our holdings accordingly.

"Hmm, Xiao Xu's idea is much more mature than before." Hearing the discussion among the three, Brother Chen responded with a smile in the group. "Indeed, judging from the market trend this afternoon, the slightly hottest sectors with active follow-up from both inside and outside the market are basically real estate, construction and decoration, building materials, film and television media, internet software, and internet applications, plus the two sub-sectors of 'smartphone industry chain' and 'new energy industry chain'."

Today, thanks to the rapid surge in trading volume and the overall positive market trend, [we saw positive market performance].

These popular sub-sectors have all attracted the attention of a large number of buyers both inside and outside the market, making it difficult to discern which is stronger or weaker.

However, as trading volume gradually stabilized and market sentiment gradually subsided, the situation improved.

The divergence in the trends of these popular sub-sectors is inevitable.

Just like Xiao Xu just said, arguing about who is stronger or weaker, or whose expectations are better, is actually not very meaningful. We should just focus on the market trend.

Let's see how the market reacts to sentiment tomorrow.

Among the popular sub-sectors that performed well today, it remains to be seen which ones can maintain their strong momentum and emerge first.

We buy into the strong and sell into the weak; that's how market trading works – it's a constant process of weeding out the weak and keeping the strong.

"Yes, Brother Chen is right." Old Zhang chuckled and said, "That's right, specifically, we still need to look at the market trend and the specific market performance."

"However, looking at the market sentiment..." Old Wu said, "Indeed, the sentiment for the 'new energy industry chain' is better. As for the other major sub-sectors, the discussion is mainly focused on a few popular core leading stocks. While these popular core leading stocks may have the potential to perform strongly independently, it would be relatively difficult for them to lead the entire sector to make a sustained upward breakthrough based solely on hype."

"Let's take another look then..."

Old Zhang responded again, and then turned his attention to the discussion platform where a group of investors gathered in the market.

At this moment, the emotions on all major investor discussion platforms across the internet are extremely heated.

The discussion was heated, and everyone seemed quite excited.

"Holy crap, the market trend this afternoon was absolutely explosive, haha... It's been a long time since we've seen such a dramatic turnaround, hasn't it? Luckily I didn't sell this morning, or I would have been devastated this afternoon."

"Damn it, that's exactly me, dying before dawn."

"Sigh, it's all tears when I think about it. I just sold at the limit down price this morning, and then it suddenly surged in the afternoon. But luckily, I managed to buy back at the limit up price. I hope I won't have to sell at the limit up price tomorrow."

"Damn, you didn't buy 'Huawen Online' stock, did you? You sold at the limit down and bought back at the limit up. Dude, you're ruthless. But with the market so hot right now and so many people bullish on 'Huawen Online,' you probably won't lose money tomorrow."

"I bought 'Huaxin Cement' with all my funds when the market opened this morning. After seeing 'Huaxin Cement' hit the daily limit and then crashed in the morning, I thought I was doomed for the day. I had already planned to cut my losses when the market opened tomorrow. But I didn't expect... I didn't lose money in the end, and even made a small profit. Speaking of which, I don't think 'Huaxin Cement' will do too badly tomorrow, right?"

"Needless to say? Look at the market enthusiasm for 'Huaxin Cement' stock. There's no doubt that it will open significantly higher tomorrow."

"The stock 'Huaxin Cement' and 'Huawen Online' are likely to perform well tomorrow."

"And then there's 'Oriental Yuhong,' which is actually the best performing stock in today's market. It hit a new high by hitting the daily limit. Among the recent hot concept stocks in the market, this is probably the only one that has hit a new high, right?"

"Yes, but today the volume of checks for 'Oriental Yuhong' has indeed increased significantly."

"It's not just 'Oriental Yuhong' that saw increased trading volume. In today's market, which stock didn't see increased volume? So I think this increase in volume is quite reasonable."

"As long as we don't go through 'Fuxing Road,' it shouldn't matter how much traffic we increase, right?"

"Indeed, regarding the stock 'Oriental Yuhong,' we only need to look at the holding motives of the funds in 'Fuxing Road.' As long as 'Fuxing Road' hasn't exited, there shouldn't be any major problems."

"Actually, the strongest sector today is still the 'new energy industry chain'. Many stocks in this sub-sector hit their daily limit up in seconds this afternoon."

"Indeed, stocks like Tinci Materials, Power Source, Shuguang Shares, and Do-Fluoride Chemicals... basically didn't offer any buying opportunities, and they immediately hit the daily limit up at the opening. But this is understandable, since the positive news released at noon today was specifically aimed at the 'new energy industry chain'."

"The core leading stocks were very difficult to buy in this afternoon without a VIP channel, but tomorrow will be different. It seems that the main stocks in the 'new energy industry chain' that hit the daily limit today will likely offer buying opportunities tomorrow."

"Hopefully, I feel that in the current market, the 'new energy industry chain' is the most certain."

"Isn't the 'major infrastructure' sector also quite certain?"

"The certainty of the 'major infrastructure' sector has always been relatively high, but the market has already largely priced in the expectations."

"That's right. Once the expected feedback is largely received, it's difficult for the trend to exceed expectations. Overall, the 'new energy industry chain,' which is directly stimulated by positive factors, is still stronger and has higher certainty."

"The key is that it's not easy to choose. It feels like all the core concept stocks in the 'new energy industry chain' are pretty much the same."

"Yes, today the 'new energy industry chain' sector did not show any differentiation, but there should be some divergence tomorrow. We'll see then, and we should be able to see which stock is the strongest and which stock is the core leader of this round of 'new energy industry chain' breakout."

Amidst the heated discussions among retail investors after the market closed.

At this moment, the market is filled with numerous financial media outlets and major industry institutions.

Faced with the dramatic V-shaped reversal in both the Shanghai and Shenzhen stock markets, and the continued positive effects of two major news items at midday, the market is facing a challenging environment.

They also began to speak out, offering their interpretations of the positive news and providing analysis and predictions for future market trends, further stimulating market investment sentiment. (End of Chapter)