Rebirth of the Capital Legend

“It seems so.” Zhang Wei heard Zhao Zhiyuan’s sigh and replied, “This fund is guiding the market at a key emotional juncture, and that’s probably what they wanted to do. Moreover, with the strength of the two related seats, ‘Fuxing Road’ and ‘Huayi Capital’, they are fully capable of doing it.”

“I don’t think that’s entirely true,” Liang Jiucheng replied. “Today’s market was already showing a deep V-shaped reversal pattern. After the major positive news was announced at noon, a lot of funds, both inside and outside the market, were rushing to buy in the afternoon. It wasn’t just the two related seats, ‘Fuxing Road’ and ‘Huayi Capital,’ that were massively increasing their positions in the ‘major infrastructure’ and ‘new energy industry chain’ sectors. Most other funds were also concentrated on these two main themes to increase their positions.”

It can be said that the two main themes of 'large-scale infrastructure' and 'new energy industry chain' are strengthening.

It is the result of the combined efforts of the market, and not the result of deliberate manipulation by the two related seats, 'Fuxing Road' and 'Huayi Capital'.

Of course, this refers to the institutions 'Fuxing Road' and 'Huayi Capital'.

Indeed, it played a significant role in stimulating market sentiment after hours.

"Without the massive increase in holdings by 'Fuxing Road' and 'Huayi Capital' on today's stock exchange's trading data, the market sentiment after the market closed today wouldn't have been so strong."

“It’s true that it’s a market-driven force,” Zhang Wei said. “But it can’t be denied that ‘Fuxing Road’ and ‘Huayi Capital’ did take advantage of the rapidly recovering market sentiment in the afternoon, using their huge capital advantage to quickly gather sentiment and bullish funds, and to move towards the ‘major infrastructure’ and ‘new energy industry chain’ themes. After all, at present, the market’s focus on these two themes is clearly more beneficial to ‘Huayi Capital’s’ holdings.”

“I don’t think so,” Liang Jiucheng said. “Huayi Capital, the major institution, doesn’t seem to have many holdings in the ‘new energy industry chain’ sector. Its main holdings are mainly concentrated in the ‘major infrastructure’ sector, as well as the liquor and white goods sectors, right?”

"Yes, that's true." Zhao Zhiyuan nodded and said, "Previously, 'Huayi Capital' did have a long-term investment strategy in stocks related to the 'new energy industry chain,' holding many stocks in this sector. However, Huayi Capital must have significantly reduced its holdings in these stocks later, right? This round of positive news regarding the 'new energy industry chain' sector came quite suddenly. I guess not only Huayi Capital didn't expect it, but other major market players probably didn't either. As a result, no one had enough positions, which led to a surge in buying in the afternoon, with many 'new energy industry chain' stocks experiencing a sudden influx of new orders, and everyone aggressively buying."

“The new energy sector can be considered a result of market forces,” Zhang Wei said. “But the ‘large-scale infrastructure’ sector clearly shows signs of being guided, doesn’t it?”

“There are indeed signs of guidance in the ‘major infrastructure’ sector,” Liang Jiucheng said. “But the fact that it can ultimately form a market synergy after guidance shows that the vast majority of investors and major funds in the market clearly agree with the underlying logic of this sector and the current valuation level.”

"Well, regardless of whether the market trend is driven by the two related seats, 'Fuxing Road' and 'Huayi Capital,' as long as the market can form a combined force in these two directions and generate enough profit-making opportunities, I don't think there's a big problem," Zhao Zhiyuan said. "We're not long-term investment funds anyway; we just need to follow market trends and the changes in hot sentiment. When the sentiment is strong, we can be more aggressive and go long with heavy positions; when the sentiment is weak, we can be more conservative and gamble with light positions. Anyway... no matter what the two related seats, 'Fuxing Road' and 'Huayi Capital,' do, they shouldn't be able to profit from me, so why worry about it?"

“It’s not that I’m conflicted,” Zhang Wei said. “I think if the major funds in the market continue to focus on the ‘major infrastructure’ theme and the ‘new energy industry chain’ theme, then other major sectors in the market will likely find it difficult to continue their upward trend without the large increase in holdings and market influence of the two related seats, ‘Fuxing Road’ and ‘Huayi Capital’.”

Moreover, once the "major infrastructure" theme continues, the "new energy industry chain" theme will also continue to attract active funds from the market.

Other main storylines will inevitably be drained of resources.

When that time comes, these main and secondary sectors that have lost too much capital will naturally experience corresponding losses due to insufficient support.

Judging from the current trend...

Clearly, the sectors most vulnerable to the blood loss effect are film and television media, internet software, and internet applications.

"I don't think so," Zhao Zhiyuan said. "I feel that the overall market volume today is still very strong. The total turnover of the two markets has exceeded 6000 billion yuan. With a volume of 6000 billion yuan, I feel that it is still very possible for the market to support two or three main themes to advance at the same time."

"The film and television media, internet software, and internet applications sectors are indeed unlikely to continue their strong performance," Liang Jiucheng said. "These sectors, as the major sub-sectors of the market, lack underlying logical support and are likely only worthwhile for volatile trading."

However, I think...

Even if these sectors fail to develop a sustained trend, they are still worth considering.

After all, the popularity and emotions generated by the daily price surges of 'Chinese Online' and 'Chinese Media' today are real.

Even if this line of reasoning has underlying logical problems, it's still flawed.

However, in certain sectors, some stocks can become top performers, attracting significant attention and driving up speculative activity.

“If a sector lacks sustainability, then even speculative stocks are unlikely to have any sustainability,” Zhang Wei said. “Without the support of a sector’s trend, even speculative stocks that are clustered together won’t go far.”

"If the funds are determined to hype it up, there's a high probability they can actually make it happen," Liang Jiucheng said. "It all depends on whether 'Huawen Online' can launch a second wave of attacks. Currently, among the film and television media, internet software, and internet applications sectors, 'Huawen Online' has the highest market recognition and discussion volume. If this stock can't make it happen, then this sector is pretty much ruined."

Of course, this is for the sake of caution, or rather, for the sake of certainty.

Focusing on the 'new energy industry chain' and 'major infrastructure' is definitely the safest approach.

“Yes, I think so too.” Zhao Zhiyuan nodded and said, “Let’s see how things go after the market opens tomorrow. If the film and television media, internet software, and internet applications sectors are indeed being drained of funds by other main themes and can’t break out, then we should decisively adjust our positions and follow the actions of the two related seats, ‘Fuxing Road’ and ‘Huayi Capital,’ and switch to the ‘major infrastructure’ theme and the ‘new energy industry chain’ theme.”

“Sigh, that’s all we can do.” Zhang Wei nodded, sighed softly, and said, “I have to say, the market influence of these two related seats, ‘Fuxing Road’ and ‘Huayi Capital’, is really high. Wherever these two related seats appear, it will inevitably become a new hot spot in the market and a new area for funds to flock together.”

“There’s nothing we can do about it,” Liang Jiucheng said. “This is the most important and dominant force in the current market. Other funds, other major institutions, various active speculative funds in the market, and especially the vast number of retail investors simply don’t recognize it.”

“Yes, so we can only follow the lead of this major fund.” Zhao Zhiyuan nodded and said.

Amidst the heated discussion among several core members of the "Shandong Gang" of speculative investors, inside the core market institutions at this moment...

Inside Jufeng Asset Management Co., Ltd., in the trading room for its main fund products.

Upon seeing today's trading data from the Shanghai and Shenzhen stock exchanges, especially the large-scale increases in long positions by the two major institutional trading seats, "Fuxing Road" and "Huayi Capital," Yu Xiaolu was quite shocked. She turned to Lu Xiangxiang, the main fund product manager, and said, "Ms. Lu, today's aggressive increases in positions by the two major institutional seats, 'Fuxing Road' and 'Huayi Capital,' make me feel that the 'major infrastructure' sector is about to embark on its second major upward trend, right? Fortunately, we stuck to this core theme and didn't significantly reduce our positions during the volatile market. Otherwise... it would have been very difficult to get our shares back!"

“Today, the fact that institutions like ‘Fuxing Road’ and ‘Huayi Capital’ were able to continuously increase their long positions on a large scale is indeed somewhat beyond expectations,” Lu Xiangxiang said, picking up where Yu Xiaolu left off. “However, whether the ‘major infrastructure’ sector can launch a second wave of sustained offensive remains to be seen.”

"Do you want to take another look?" Yu Xiaolu was slightly taken aback.

Lu Xiangxiang nodded and said, "Although the market saw a large increase in trading volume today, this volume was directly stimulated by the two major positive news events at noon. Whether the off-market funds that entered based on these two major positive news events can stay in the market remains to be seen."

If the market can maintain a stable trading volume range of 4500 billion to 6000 billion yuan going forward.

Therefore, there is a high probability that the "major infrastructure" sector will experience a second wave of market rally.

If market volume quickly falls back to the 3000-4000 billion range, then the sustainability of the rally will be highly questionable.

At present, it is not yet clear how sustainable it will be.

Therefore, it needs to be verified by subsequent market trends.

Of course, regardless of the circumstances, the large-scale increase in holdings by the two major seats, 'Fuxing Road' and 'Huayi Capital,' today is definitely a sustained positive for the market and could very well ignite bullish sentiment tomorrow, leading to a large positive candlestick pattern.

“Hmm.” Yu Xiaolu nodded and said, “Judging from the market sentiment, many stocks that the ‘Fuxing Road’ and ‘Huayi Capital’ seats have significantly increased their holdings in, such as ‘Oriental Yuhong’, ‘Ganfeng Lithium’, and ‘Tianqi Lithium’, have already jumped to the top of the market’s investor discussion rankings. I feel that these stocks will likely hit the daily limit tomorrow.”

"Given the current premium capabilities of the two major seats, 'Fuxing Road' and 'Huayi Capital'..." Lu Xiangxiang said, "It is indeed highly likely that these stocks will hit the daily limit tomorrow. However, it cannot be said that these stocks will hit the daily limit tomorrow; at most, it will be in line with expectations. Therefore, the real test of the market trend will most likely be next Tuesday."

"So what about our trading strategy?" Yu Xiaolu asked. "Should we continue to maintain a static position and keep a heavy investment in the 'major infrastructure' sector?"

Lu Xiangxiang nodded and said, "That's for sure. As long as the 'major infrastructure' sector doesn't break down, there's no need for us to rush to take profits or make new strategic changes. We can just let the profits run. And looking at market sentiment, it's clear that everyone's bullish views are still focused on the 'major infrastructure' and 'new energy industry chain' sectors. So... let's hold our positions and wait for new market developments."

"Okay." Yu Xiaolu nodded.

As the two reviewed and discussed the future market trend and their own investment strategies, they...

At the same time, inside the trading room of the "Blue Chip Hybrid Selection" main fund product at "Nuoan Capital", fund product manager Wang Shujie was quite shocked to see that the two related seats, "Fuxing Road" and "Huayi Capital", were once again sweeping the list of top gainers and losers in the two stock exchanges. He couldn't help but sigh, "This fund's style is still the same. Whether they buy or sell, they do it in a big way, as if they're afraid others won't know."

"However, the two related seats, 'Fuxing Road' and 'Huayi Capital,' still have no problem with today's buying opportunity," said Li Shangfeng, the head of the fund product trading team. "With the stimulus of these two major positive factors, market sentiment has reversed. In addition, the major positive stimulus regarding the 'new energy industry chain' has led to a complete reversal of the fundamentals of the 'new energy industry chain.'"

In this fundamental reversal...

It's impossible for 'Huayi Capital' not to quickly reclaim its stake.

Therefore, this institution's rapid and large-scale increase in holdings in the 'new energy industry chain' sector today was entirely predictable.

However, something unexpected happened...

This institution actually increased its holdings significantly in the 'major infrastructure' sector.

It seems that the current "major infrastructure" sector is losing momentum. Subsequent performance may not truly exceed expectations, and the rate of increase in housing prices is gradually slowing down.

I feel that the 'major infrastructure' sector lacks cost-effectiveness.

Of course, once the fundamentals of the 'new energy industry chain' reverse, there will be room for speculation in this sector.

This kind of opportunity has been seen by almost all the funds in the market, so the valuation recovery has been very rapid, making it difficult for us to have the opportunity to increase our holdings in a concentrated manner.

Compare the rapid increase in holdings by the two related seats, 'Fuxing Road' and 'Huayi Capital'.

Their institution's intention to increase its holdings.

Especially regarding the intention to increase holdings in the 'new energy industry chain' sector, the response was indeed much slower, and very few shares were acquired this afternoon. (End of Chapter)