Rebirth of the Capital Legend

"The entire market sentiment has reversed in just half a day!" Li Jinshi exclaimed in the 'Fushan Group's' main speculative capital group, seeing the comments from various financial media outlets and institutions. "Today's market trend is truly magical."

“It’s truly surreal.” Chen Guiyun smiled and nodded slightly in response. “When the market closed this morning, the entire market looked like a scene of utter devastation. Many financial media outlets and investors were shouting predictions that the Shanghai Composite Index would fall below 3000 points and return to the 2800-point mark, while also proclaiming the end of this rebound and the continuation of the bear market. Unexpectedly, in just half a day, the entire market, both inside and outside, is filled with excited and enthusiastic voices, all actively bullish. Even major financial media outlets, securities firms, and fund institutions have quickly changed their views, from pessimistic to extremely bullish. Look at the market now; there are countless predictions of a direct target of 3300 points.”

"Institutions..." Li Jinshi chuckled and said, "They're just a bunch of guys who are bullish when prices rise and bearish when prices fall, so they're not really any reference value."

"The opinions of institutions are indeed not very valuable for reference," Liao Guoxiang chimed in. "However, the changes in market trends and fundamentals brought about by substantial market benefits are undeniable. The two major positive developments this afternoon were very strong, especially the 'new energy subsidies' news. It not only clarified the rumors of subsidy reductions but also emphasized that investment and support for the 'new energy industry' will likely continue to increase in the future. This has quickly transformed the uncertainty surrounding the future of related sectors and stocks in the 'new energy industry chain' into a relatively certain expectation."

“Yes, what Lao Liao said is indeed true,” Chen Guiyun said. “The ‘new energy subsidy’ policy has indeed directly changed the basic logic and fundamentals of the entire ‘new energy industry chain’, turning future uncertainty into relative certainty. Otherwise, the market trend in this sector wouldn’t have been so strong today. Nearly 50 stocks in the entire sector hit their daily limit, which would have been unimaginable before the policy was announced.”

"But actually, when the market opened today, when the entire 'new energy industry chain' sector surged, the broader market didn't follow suit on a large scale," Li Jinshi said. "It seems that it was only after 'Huaxin Cement' reversed its trend and hit the daily limit that market sentiment suddenly surged and the trend showed a clear reversal. I feel that if it weren't for that stock driving the market at that time, the market trend today might have been very different."

"Huaxin Cement really deserves credit for today," Liao Guoxiang said. "This stock was the core leading stock in today's 'major infrastructure' theme. In the afternoon's sentiment, its ability to quickly rebound and hit the daily limit did indeed drive a large number of stocks in the market. However, the reason why this stock was able to be pulled up again and form the final synergy was because at the moment the market opened in the afternoon, under the direct impact of a major positive news, the entire 'new energy industry chain' theme created an explosive profit-making effect. If there hadn't been such a strong profit-making effect at that time, the active short-term funds in the market might not have dared to trade this stock, and might not have dared to push it back up."

"You could say that," Li Jinshi nodded and continued, "I think the most important reason why today's market trend could ultimately lead to such a general rebound is that, in addition to the two major positive stimuli, there is also the huge combined force of the market."

Actually, without the two major positive developments at noon today...

After sufficient adjustment, the market is likely to rebound strongly after a sell-off and shakeout tomorrow morning.

However, two major positive developments at noon today accelerated this process, causing a rapid exchange of positions between bulls and bears in the market.

“Yes, I agree with what Lao Li said,” Chen Guiyun replied. “Indeed, the positive news only accelerated the change in market conditions. In fact, even without the influence of these two positive factors, the market would most likely have been able to stabilize at 3000 points and gradually complete the rebound.”

"But this approach is clearly more effective," Liao Guoxiang said. "This extreme V-shaped rebound cleanses the market the most effectively. After today's dramatic volatility, with trading volume exceeding 1000 billion, most stocks in the market will not encounter significant resistance in the 10% to 20% upside potential from their current price levels. After all, the truly significant resistance has already been absorbed during today's trading session."

“A lot of weak hands have definitely been cleared out,” Li Jinshi said. “But while floating shares were being cleared out, the number of people taking profits in the market also increased.”

“Profit-taking is not a problem,” Liao Guoxiang said. “As long as the profit-making effect can be maintained, the continuous accumulation of profits will actually be a potential driving force for the stock price to continue to rise.”

"Similar to the stock 'Oriental Yuhong'?" Li Jinshi asked.

Chen Guiyun smiled and replied, "Speaking of 'Oriental Yuhong,' this stock is really strong. In recent performance, it has rarely underperformed the market index. Even during the adjustment phase, it usually falls less than the market when it falls and rises more than the market when it rises."

"Yes, the stock 'Oriental Yuhong' is indeed showing a very strong trend." Liao Guoxiang nodded. "I didn't expect that this stock, which was already at a clearly high level, could continue to reach new highs, and even hit the daily limit today. It is indeed quite beyond expectations."

“The key is that in the recent trend of this stock, regardless of whether it goes up or down, the trading volume is not high,” Li Jinshi said. “I think that’s the scariest thing. Take the stock ‘Dongfang Yuhong’ for example. It fluctuated by more than 10 points and closed at the daily limit, but the trading volume did not increase much.”

"This shows that the internal structure of this check is still relatively stable, right?" Chen Guiyun said. "And it seems that the funds from 'Fuxing Road' are still locked up in the market and haven't left."

“It’s just that the chip structure is too stable,” Li Jinshi said. “Logically speaking, the chip structure of this check should have been dispersed long ago.”

“This is the enormous influence of the ‘Fuxing Road’ seats,” Chen Guiyun exclaimed. “As long as the underlying logic doesn’t collapse, and with ‘Fuxing Road’ continuously locking up shares, this stock will maintain a relatively high level of market discussion. And as long as the hype is maintained, the stock’s performance is usually not too bad. After all, as long as there is hype, there is a high probability that there will be follow-up funds to manipulate the market.”

“It’s not just bandwagon money,” Liao Guoxiang said. “Now, among the various groups of funds participating in the ‘Oriental Yuhong’ stock, retail investors’ bandwagon money is no longer the majority, but institutional funds that are grouped together should be the majority of insider investors.”

"That's about right," Li Jinshi nodded and said, "I also think that institutional funds are the core force driving the market trend of 'Oriental Yuhong' right now. There aren't many retail investors left following the trend." Chen Guiyun nodded and agreed, "In terms of short-term trading potential, within the entire 'major infrastructure' sector, 'Oriental Yuhong' is definitely not as good as 'Huaxin Cement' right now. Therefore, many short-term funds, if they can participate in 'Huaxin Cement,' will most likely not choose 'Oriental Yuhong.'"

"That's right." Liao Guoxiang nodded slightly and continued, "Actually, in today's market trend, besides 'Huaxin Cement,' 'Beijiang Transportation Construction' is also worth paying close attention to in the 'major infrastructure' sector. However, because it was locked at the daily limit up for the whole day, retail investor participation was low, resulting in less discussion and attention in the market, both during the afternoon session and after the market closed, compared to 'Huaxin Cement.' But I think... this stock clearly has potential, and its circulating shares are much smaller than 'Huaxin Cement.' I feel that the subsequent speculation potential of this stock might even surpass that of 'Huaxin Cement.'"

"'Beijiang Jiaojian' stock?" Chen Guiyun glanced at the stock's chart pattern and candlestick chart and said, "The chart pattern is indeed very strong, but the market enthusiasm and discussion are indeed a bit lacking. There aren't many people paying attention to or discussing this stock right now. In terms of market enthusiasm, this stock hasn't even entered the top ten of the market's hottest stocks list yet."

“But this check definitely has potential,” Liao Guoxiang said.

“Yes, the stock ‘Beijiang Jiaojian’ is indeed very volatile.” Li Jinshi nodded slightly and said, “In the past few months, this stock has been present in every round of speculation on the ‘major infrastructure’ theme. Every time it’s speculated, this stock can pull up several limit-up days. However, because it’s volatile, the fluctuations are also large. If you don’t time it right, it’s still easy to lose money.”

“Comparatively speaking, isn’t ‘Huawen Online’ a more certain stock?” Chen Guiyun paused and said, “Today, ‘Huawen Online’ has been extremely well-known in the market, with a strong rebound from the bottom to the top. If this stock opens higher and continues to rise, quickly breaking through the previous high, then… I think the vicinity of the new high should be a relatively clear point to increase holdings.”

“‘Huawen Online’ stock will most likely open high and continue to rise tomorrow, right?” Li Jinshi chuckled and said, “I actually bought quite a few shares of this stock at the limit down price today. After trying to buy the dip so many times, I finally succeeded once and made a profit of more than 20 points in the day.”

"Old Li, how much did you buy?" Chen Guiyun asked.

Li Jinshi smiled and said, "I bought it the moment I saw the limit down price start to loosen. I bought less than 2000 million yuan worth of shares. When the stock quickly turned red from the limit down, I knew I had bought too little. But by then, I didn't dare to add any more shares. I could only watch helplessly as the stock hit the limit up."

"You bought nearly 2000 million chips?" Chen Guiyun exclaimed. "That's quite a lot. Congratulations!"

"Old Chen, what did you buy today?" Li Jinshi asked. "You must be fully invested, right?"

“I didn’t buy a full position,” Chen Guiyun said. “I bought some shares of ‘Huaxin Cement’ at the opening of the afternoon session, and then bought some shares of ‘Shuguang Shares’ at the limit up price.”

"Damn, how did you buy 'Shuguang Shares' stock?" Li Jinshi said. "I remember this stock went straight to the daily limit up when it opened, right? I placed my order at 1 o'clock sharp, and it wasn't filled by the close. Old Chen, your hand speed is amazing. You managed to grab some shares."

"I was lucky; I happened to be near the front of the queue," Chen Guiyun said.

"Where's Lao Liao?" Li Jinshi asked. "Which stock did you buy today? It wasn't 'Huaxin Cement' again, was it?"

“No, not at all,” Liao Guoxiang said. “I bought some chips for ‘Oriental Yuhong’ and then a lot of chips for ‘Lixun Precision’.”

"'Lixun Precision'?" Li Jinshi was slightly taken aback and said, "It doesn't seem like the core theme of the market today. Moreover, judging from the sentiment and discussion, the market enthusiasm for this theme is far less than that for the 'major infrastructure' theme, as well as film and television media, internet software, internet applications, and the 'new energy industry chain' sub-theme. Lao Liao, why would you take a liking to this stock?"

Liao Guoxiang said, "The 'smartphone industry chain' is closely following the movements of the 'new energy industry chain.' At the same time, Apple's new product launch is just half a month away. During this period, the probability of the market continuing to speculate on the 'smartphone industry chain' is still very high. Of course... the main reason is that I reacted too slowly. I didn't get to see any good stocks hit the daily limit, so I could only settle for the second strongest main theme in the market."

“‘Lixun Precision’ is actually not bad,” Chen Guiyun said. “The fundamentals of this stock are very good, and it is also a core stock of the ‘Apple concept.’ It feels like as long as you speculate on Apple’s press conference or this year’s new Apple products, you can’t avoid this core stock.”

“That makes sense,” Liao Guoxiang said. “The flexibility might be a little less, but the stability and certainty are still quite sufficient.”

"Let's not talk about the 'Lixun Precision' check," Li Jinshi said. "I didn't expect you, Lao Liao, to actually put your hand on the 'Oriental Yuhong' check. To be honest, at this price, it takes a lot of courage to continue buying in large quantities. Anyway, at this price, I wouldn't dare to buy any more."

Liao Guoxiang chuckled and said, "My thoughts are different from yours. I think that 'Oriental Yuhong's' new high is actually a very certain buying opportunity. The strong will always be strong. Although the market enthusiasm for this stock has cooled down a bit recently, I think it will most likely continue to rise and explore new upward space before a large-scale surge in trading volume occurs." (End of this chapter)