Rebirth of the Capital Legend

"After yesterday's trend, the ChiNext index can only continue to move upwards, right?" Zhang Wei said. "Analyzing the K-line pattern of the ChiNext index, the only path for small and mid-cap stocks is indeed upward. If small and mid-cap stocks move upwards, then the second wave of speculation in 'Huawen Online' stock is basically inevitable."

I agree that we should continue to increase our holdings in 'Chinese Literature Online' at this position.

Actually, 'Huawen Media' is also a good stock. Although its price movement is following the trend of 'Huawen Online', it is indeed at a much lower price.

Moreover, if it is confirmed that 'Chinese Online' stock can experience a second wave of growth.

Therefore, the speculative value of the stock "Huawen Media" is still quite high; at least the expected profit margin is not low.

"Judging from the previous trends, the three stocks 'Huawen Online,' 'Huawen Media,' and 'Yue Media' have been in a continuous correlation, right?" Liang Jiucheng said. "If we're talking about cost-effectiveness, 'Yue Media' is actually a good stock. Although it has been affected by the negative impact of major shareholders reducing their holdings, its recent performance has clearly lagged behind the major market indices and the corresponding sector indices. Moreover, as long as 'Huawen Online' and 'Huawen Media' continue to rise and break out upwards, then the active short-term funds in the market will inevitably speculate on 'Yue Media.' In fact, this stock follows the same logic as 'Huawen Online,' and its position is much lower than 'Huawen Online.'"

“According to the view that the strong get stronger…” Zhao Zhiyuan said, “I think ‘Huawen Online’ is a safer choice. Other follower stocks, although they may have some speculative value, are less certain. Based on previous experience, we should not put all our funds into one line. We can diversify our holdings into the ‘new energy industry chain’ theme and the ‘major infrastructure’ theme, which is even better.”

"There are still no obvious opportunities in the 'new energy industry chain' sector today," Zhang Wei said. "Those who wanted to buy were immediately locked at the daily limit up after the market opened, and those who didn't want to buy had to give up because the trend was too weak. Let's see how the 'new energy industry chain' sector performs tomorrow. Judging from today, there's no value in participating."

As for the 'major infrastructure' sector, the best buying opportunity seems to be the moment the two stock exchanges open.

It's not easy to participate now, even if you want to.

After all, both 'Oriental Yuhong' and 'Huaxin Cement' are currently near their daily price limits.

Other concept leaders that followed the trend, such as "Shougang Group," "Financial Street," "Yu Development," and "Shenhuo Shares," have shown significantly weaker performance than the four stocks mentioned above: "Huaxin Cement," "Oriental Yuhong," "Beijiang Jiaojian," and "Tianshan Cement." Therefore, they also offer little value for investment.

"Speaking of which, isn't 'Tianshan Cement' somewhat overshadowing 'Huaxin Cement' today?" Zhao Zhiyuan said. "Unexpectedly, of the three core leaders in the cement sector, 'Huaxin Cement,' which was originally the strongest performer, has now become the weakest. On the contrary, 'Beijiang Jiaojian' has become the strongest leader in this round of 'major infrastructure' sector. Looking at the current market's stock discussion popularity rankings, it's clear that the market enthusiasm for 'Huaxin Cement' is rapidly decreasing, while the market enthusiasm and discussion surrounding 'Beijiang Jiaojian' are continuously soaring, making it the third most popular leading stock in the market right now."

“I don’t think either ‘Beijiang Jiaojian’ or ‘Tianshan Cement’ is a match for ‘Huaxin Cement’. After all, among these three stocks, ‘Beijiang Jiaojian’ and ‘Tianshan Cement’ actually have very small circulating shares,” Liang Jiucheng said. “With such small circulating shares, these two stocks cannot absorb the combined efforts of large speculative funds and other large capital groups in the market. Therefore, stocks with such a huge difference in circulating share size cannot really be considered to have successfully positioned themselves.”

I think the stock that truly positions itself against 'Huaxin Cement' is 'Oriental Yuhong'.

Of course, it could also be said that the core leading stock in the entire "major infrastructure" theme has always been "Oriental Yuhong," while "Huaxin Cement" was merely a temporary catch-up stock chosen by various funds in the market in the previous few trading days. In terms of its driving effect on the entire "major infrastructure" theme, "Huaxin Cement" is completely incomparable to "Oriental Yuhong."

However, the 'Oriental Yuhong' stock can now experience a second spring.

Indeed, it is inseparable from Mr. Su's "Revival Road" seat, the continuous increase in holdings of this stock, and the long-standing factor of locking up shares.

Even though the fundamentals of 'Oriental Yuhong' are excellent and its future prospects are relatively certain.

However, without the impetus from President Su's "Revitalization Road" initiative, it seems unlikely that this investment would have reached its current level, nor would it have had such a strong driving effect on the entire "major infrastructure" theme.

“Yes, I agree.” Zhang Wei nodded and said, “However, after hitting a new high, ‘Oriental Yuhong’ does seem to be accelerating. I don’t think it will form a major upward trend in the near future, right? If it does go up… and it really is a major upward trend, then the speculative value will be quite high. After all, the market’s expectations for this stock and its future performance are still very strong. Everyone thinks that this stock is likely to be the gatekeeper of a future market value of 100 billion. I think that although it may not reach 100 billion under the endgame thinking logic, as long as it reaches 70 billion, there is at least more than double the potential!”

"Let's look at the cost-effectiveness," Zhao Zhiyuan said. "I don't want to buy 'Oriental Yuhong' at its current price. If the expectations meet everyone's expectations, that's fine. But if the future performance doesn't meet everyone's expectations, then with President Su possibly reducing his holdings and the collapse of the major institutional funds in the market, its downward trend will be terrifying. Although we are not a group of long-term institutional funds in the market, I think this kind of thinking of risking big for small is not quite right."

"Actually, it's still the 'new energy industry chain' sector. Stocks like 'Shuguang Shares,' 'Ganfeng Lithium,' and 'Tianqi Lithium' offer higher certainty and better speculative value," Zhang Wei said. "Unfortunately, none of these stocks offered a buying opportunity today. If they open significantly higher tomorrow, it will be difficult to participate. After two consecutive limit-up days, if they continue to open higher, the large number of early-stage profit-takers in the market will likely be unable to resist the urge to sell, right?"

“The logic behind Ganfeng Lithium and Tianqi Lithium is very clear,” Zhao Zhiyuan said. “What’s the logic behind Shuguang Shares? When the market opened this morning, I was really startled to see a million lots of buy orders for this low-priced stock.”

Zhang Wei responded, "It's due to the positive stimulus to the new energy industry chain and the expectation of restructuring. Otherwise, why would 'Shuguang Shares' be so arrogant with its selfie? It's because of the expectation of restructuring that it's so impressive."

“Restructuring expectations?” Zhao Zhiyuan said, “Isn’t this just something that’s not going to happen?” Zhang Wei chuckled and said, “There’s still a chance. And whether or not it will actually be restructured in the end is not important. The key is that the large number of investors in the market, especially the vast number of retail investors, believe that this stock will be restructured and merged. Expectations are far more important than actual restructuring news.”

“Haha, Lao Zhang’s words make perfect sense,” Liang Jiucheng said. “Indeed, for the entire trading market, expectations are more important than actual positive news. As long as there are expectations, and those expectations continue to strengthen, then whether there is any real positive news, or whether that positive news can actually be implemented, is simply not important.”

Regarding the stock of Shuguang Shares...

Currently, most investors in the market believe that this stock is the core leading stock in the 'new energy industry chain', and this is generally a consensus.

There is no doubt about this.

The issue right now isn't about the logic behind this check.

The key issue is that the expectations for this stock are too uniform, leaving no opportunity for change of hands. I feel that this stock is likely to experience a one-off surge.

On the contrary, it's the stocks 'Ganfeng Lithium' and 'Tianqi Lithium'.

Due to their market capitalization and circulating shares, these two stocks will likely hit their daily limit up today, but will probably open up tomorrow.

These two stocks have sound fundamentals and are positioned at the upstream end of the 'new energy industry chain'.

I believe that with the dual support of Mr. Su's 'Huayi Capital' and 'Fuxing Road' investment accounts, it's highly likely that it will follow a similar trajectory to 'Oriental Yuhong'. Moreover, currently, the market capitalization and free float of 'Ganfeng Lithium' and 'Tianqi Lithium' are not significantly larger than 'Oriental Yuhong' before its initial surge, offering relatively ample room for growth.

"Hmm, Lao Liang's analysis is quite good," Zhang Wei said. "If the stocks 'Tianqi Lithium' and 'Ganfeng Lithium' open and fall back tomorrow, I will definitely increase my position in the market. I'm just afraid that the funds in the market will grab too much and continue to lock in the daily limit tomorrow."

Liang Jiucheng said, "It shouldn't be possible. The probability is very small. After all, the market value of these two stocks is not small. It's impossible for them to keep pushing the price up like this. Moreover, if they continue to lock in the daily limit tomorrow, they will need to withstand a large amount of profit-taking in the market, as well as retail investors who follow the trend and sell off."

“Yes,” Zhao Zhiyuan said. “Judging from the current market volume, it doesn’t support the major core leading stocks in the market to continue to rise. In fact, at the beginning of the trading day, it was very clear that when market sentiment declined and risk aversion increased, a lot of funds chose to go for the main board’s heavyweight stocks and take over the risk-averse trend. It can only be said that… fortunately, ‘Huawen Online’ has emerged and led a group of small and medium-sized stocks to create a certain profit-making effect, causing the overall market trend to shift from the previous focus on heavyweight stocks to small and medium-sized stocks.”

“That doesn’t seem right,” Zhang Wei said. “I have a feeling that the strength of the main sectors on the main board today, such as liquor, white goods, pharmaceuticals, consumer goods, power, finance, and petrochemicals, is a catch-up to the market trend last Friday. Last Friday, these stocks were clearly lagging behind the overall market performance. Today, with the market sentiment improving, these stocks have a need for a catch-up.”

"The demand for a catch-up rally is only one aspect," Zhao Zhiyuan said. "The main reason is the rise in risk aversion during the morning session."

"There's also the pursuit of Mr. Su's 'Huayi Capital' seat by major institutional investors," Liang Jiucheng added. "Actually, upon closer analysis, the main sectors of the main board, such as liquor, white goods, pharmaceuticals, consumer goods, power, finance, and petrochemicals, have indeed shown signs of a rally after their recent adjustments. It mainly depends on the overall market volume. I feel that as long as the market can stabilize at a volume of 5000 billion, the performance of these heavyweight sectors should be quite good."

"Yes, I think so too," Zhang Wei said. "Moreover, for the Shanghai Composite Index to break through the 3100-point mark, it needs the support of heavyweight sectors, right? If these heavyweight sectors don't exert their strength, it will be difficult for the Shanghai Composite Index to break through the previous consolidation range and establish a new trend!"

"The Shanghai Composite Index is now very close to 3100 points," Zhao Zhiyuan said. "Judging from the situation, it's pretty much a foregone conclusion that the Shanghai Composite Index will break through the previous consolidation range and form a new upward trend, right?"

“As long as the trading volume can keep up, I think there’s no suspense,” Zhang Wei said. “But specifically, it still depends on the performance of the major popular themes and the overall market’s profit-making effect. No matter when, if we want to attract funds from outside the market to continuously enter the market, we need the cooperation of a continuous profit-making effect in the market, right? As long as the profit-making effect is generated, there’s no need to worry about the market not being able to continue to break through upwards.”

“That makes sense,” Liang Jiucheng said. “We should focus on the performance of the top ten most popular leading stocks in the market. As long as these leading stocks show a positive trend in the market, I think we can be a little more aggressive in our trading strategy.”

"Haha..." Zhao Zhiyuan laughed loudly, "Old Liang, you're right. Anyway, I'm quite optimistic. If the market were going to fall, it wouldn't have dropped sharply at the beginning of the day and then quickly rebounded. On the market now, a lot of the funds that bought at the bottom yesterday have been cleared out. At this moment, the overall selling pressure on the market is not great, and the potential for further decline is insufficient. So... wouldn't the market only be able to go up?"

After saying that, Zhao Zhiyuan turned his attention back to the two market charts.

At this moment, market enthusiasm surged, and 'Huawen Online,' which had once again become the core focus of attention in both Shanghai and Shenzhen stock exchanges, began its aggressive upward push towards the daily limit. (End of Chapter)