Rebirth of the Capital Legend

"It seems the market's upward momentum is still quite strong!" Seeing the market break upward again the moment it opened in the afternoon, and the market sentiment showing signs of improving again compared to the midday close, Xu Qiao, a member of the 'Magic City Ultra-Short Gang', a major speculator, smiled and said, "The market support for Baofeng Technology is stronger than expected. I feel there's a good chance that this stock will hit the daily limit this afternoon."

"The market trend for Baofeng Technology is indeed much stronger than expected, but considering the current turnover rate, it will still be difficult to hit the daily limit, right?" After hearing Xu Qiao's words, Lao Zhang in the group took over and said, "Let's wait and see. The market trend at the beginning of the trading session is a concentrated reflection of the midday sentiment. The true strength of the market will only be revealed after the midday sentiment is digested and the market returns to a rational state. Now... the certainty of taking action is not very high. I think we can wait a little longer."

"Yeah, I think so too." Old Wu nodded and said, "The overall strength of the market trend remains to be seen. At least whether the Shanghai Composite Index can hold steady at 3100 points is still a bit unknown. If the Shanghai Composite Index cannot stably and effectively hold steady at 3100 points, then the overall market trend will most likely remain in the oscillating range of 3000 to 3100 points. If the index trend cannot break through, naturally the major market trends and the corresponding hot concept stocks will not be able to effectively break through and continue to move upward."

"I don't think there should be any major problems, right?" Xu Qiao said. "Market volume remains relatively stable. The Shanghai Composite Index is also showing strong upward momentum, and market sentiment is in line with this." Furthermore, the two core themes of major infrastructure and the new energy industry chain are showing clear momentum. Under these circumstances, I believe it won't be difficult for the Shanghai Composite Index to break through and stabilize at 3100 points."

"If the Shanghai Composite Index wants to hold steady at 3100 points, I think the current trend of the main line of infrastructure and the main line of the new energy industry chain is not very related, right?" Lao Zhang said, "The main lines of the market that are strongly correlated with the trend of the Shanghai Composite Index should be liquor, white goods, medicine, consumption, electricity, finance, petrochemicals... These core main line sectors tend to be in the direction of the A50 index components. At present, the trends of these core main line sectors are still quite hesitant. Many major institutional capital groups gathered in these core main line sectors do not have the motivation to actively attack. At the same time, looking at the market trend, with the small and medium-sized stocks, small and micro-cap stocks and other related main lines and concept sectors still continuing to siphon the liquidity of funds from other weighted main line sectors in the market, it is difficult for the core main line sectors of the market to attract the attention of concentrated buying capital groups.

In other words, at present, the market's main weight sectors are in a process of continuous bleeding.

Since there is not enough active buying capital group to effectively take over.

Then, it is obvious that it will be difficult for the main weight sectors such as liquor, white goods, medicine, consumption, electricity, finance, petrochemicals, etc. to stand out and form a consistent long effect.

However, when these weighted main sectors cannot form a consistent long-term effect.

So, without the support of these main sectors, it is indeed difficult for the Shanghai Composite Index to break through 3100 points unimpeded.

In fact, this situation was already evident in the morning near the midday closing.

I remember that at that time, the market was also constrained by the drag of a number of heavyweight main-line sectors, so the market showed a diving trend.

At that time, the plunge of major sectors and related indexes was obviously caused by the weak performance of a number of the market's heavyweight main sectors.

Also...

After the market's extreme rebound last Friday.

In fact, in the current market, the group of profit-making funds in the market is very large, and many of the profit-making fund groups are short-term fund groups.

There is such a large group of short-term profit-making funds that are interfering with the market trend.

So, I think the probability of the market making a strong breakthrough and continuing to rise before resolving this wave of profit-taking is not very high.

After all, the pressure of this position is quite great.

Moreover, after the previous continuous rebound, many stocks have begun to touch the area of concentrated trapped shares left over from the end of the last bull market.

In this case, it is obvious that the upward momentum is smaller than the potential selling pressure.

In this way, the index will continue to rise, and the probability of a continuous breakthrough is low.

Even though the market sentiment remains good and investment confidence continues to pick up, the market volume performance is also very good, with a continuous influx of incremental off-market funds entering the market.

Then, it is likely that the large amount of short-term profit-making funds accumulated in the market must be cleared out first.

Only by resolving the current huge potential selling pressure can we have the momentum to break through upwards with ease."

"Well, I agree with what Lao Zhang said." Lao Wu nodded and responded, "Under the current market situation, relying solely on sentiment is far from enough. With the market index at this position, it's not easy to continue to attack and break through. In fact, instead of continuing to attack and overdraw the market's potential for long positions, it's better to take a short break here to clean up and digest the large amount of short-term profit-taking funds accumulated in the market. After this part of the profit-taking funds is completely digested, the internal chip structure will further settle down, and continuing to attack may be more effective.

Now...

When a large amount of profit-taking funds in the market have not been digested.

I think we should still maintain a relatively cautious attitude and pay more attention to the abnormal changes in the market's several core main trends, as well as the abnormal changes in many popular concept stocks in the market.

Overall, the market structure is still one of main line rotation.

There have always been local profit-making effects in the market, but at the same time, if you are not careful, buy the wrong stocks, and invest heavily at the wrong time, you will still lose money. "

"Well, there's absolutely no problem with the strategy of focusing less on the index and more on individual stocks." Brother Chen also responded at this time, "In the current market trend, there are only a few certain market main lines. If you want high certainty, then you can continue to participate in the main line of large-scale infrastructure and the new energy industry chain. If you want to play with flexibility, then the smartphone industry chain and the emerging industry chain headed by film and television media, Internet software, and Internet applications are also fine.

If you want stability and certainty, then go for the A50 line.

Relatively speaking, the current market is easier to navigate than the market trend in the previous period. The trend is clearer and the levels are more distinct.

Of course, the expectations for many core concept leading stocks have already been fully reflected in the morning. If you want to intervene now, I am afraid it is not easy to choose the target. "

"Brother Chen, what do you think of this check from Baofeng Technology?" Xu Qiao asked.

Brother Chen responded, "The performance of Baofeng Technology today is a bit like a huge surge from the bottom. It's actually possible to invest in it and gamble. However, the fundamentals of this stock are very poor, and I don't think there's any possibility of it being realized in the future. So when gambling, you still have to pay attention to the risks. This stock doesn't fit my trading logic, so I won't participate anyway. You can do whatever you want."

"Isn't this Baofeng Technology check considered a star stock in the last bull market?" Lao Zhang said, "Generally speaking, star stocks like these from the last bull market, due to their inherent market recognition, will fall too much and a group of short-term speculators will intervene to create a rally.

But it is only limited to the market trend of oversold rebound.

Generally speaking, it is still difficult for stocks like this to develop independent trends or sustained trends.

At most, there will be three or four consecutive rebounds, and then as sentiment subsides, the market will gradually fall back to the starting point with shrinking volume.”

"So, the value of participation should not be high, right?" Xu Qiao said.

Lao Wu responded: "Instead of gambling on this check, I think it's better to gamble on the popular stocks in the 'Apple industry chain' sub-sector. Apple will have a new product launch this month. Although this is a clear expectation, based on the market enthusiasm and the heated discussions online, Apple's new product launch this year may still exceed expectations.

Also, there is the mobile phone industry chain.

A number of popular core stocks are basically supported by performance.

With relatively high future performance as a support, I think it's much safer to gamble on it than to gamble on the "Storm Technology" check."

"Haha... I think so too," Lao Zhang said. "The Apple supply chain is actually quite good. Looking at the trend of 'Lixun Precision', both the volume and the presence of large buying funds are quite obvious. It seems this stock has clearly become the leading stock in the entire Apple supply chain.

If this check can continue to be strong and continue to open up space.

It should attract more market funds and investors' attention, focusing on this line of Apple's industrial chain.

And as Brother Chen just said, this line originally had a very high certainty expectation during this month's time period.

I think in this situation, you can gamble boldly and with confidence.

In this deterministic expectation situation.

Even if the market performs poorly in the future, the room for downward adjustment will be quite limited.

Of course, I think the overall market value and circulating volume of the stock "Lixun Precision" are still a little too large. It is enough to be the core stock leading a branch sector, but it is still difficult to create a very high space.

As for the performance of several core concept leading stocks in the Apple industry chain and their recognition by funds.

I feel that Changying Precision's check seems to have stronger market popularity, market recognition, and popular discussion.

I think Changying Precision will most likely become the leading concept stock in the Apple industry chain."

"Well, Changying Precision's stock is indeed trending very well," Xu Qiao nodded and said, "But there are still divergent market trends. Right now, this afternoon's focus will be on Changying Precision and Baofeng Technology. Whichever stock hits the daily limit first will be the first to go up."

"To a certain extent, these two stocks also represent the different trends of two sub-sectors, right?" Lao Zhang said. "If Baofeng Technology hits the daily limit first, then the emerging industry chain, that is, the film and television media sector, will likely perform better in the afternoon market. If Changying Precision hits the daily limit first, then the market heat for the Apple industry chain will likely be even higher, and the active short-term capital groups in the market will likely prioritize the Apple industry chain."

"Haha, I think so too," Old Wu said. "For Changying Precision and Baofeng Technology, the buying points are actually quite consistent. The most certain buying point is the moment when these two stocks hit their daily limit. Beyond that, there's a lot of uncertainty about the buying point."

"Besides the preferences of short-term investors..." Xu Qiao said, "it still depends on the direction of the broader market. Currently, the index is unlikely to break through, so we must plan and operate according to the volatile market. In a volatile market, sentiment is no longer the primary factor driving investors. Instead, supporting sectors with stronger expected certainty, or leading stocks in related concepts, are more likely to be favored by short-term investors."

"Yeah, that's right, I think so too." Old Wu nodded slightly and said, "So, I'm more inclined to think that Changying Precision will outperform Baofeng Technology. However, judging by the current overall market sentiment and the attention most investors are paying to these two stocks online, Baofeng Technology is clearly receiving more attention and is being discussed more intensely. The specific direction of the market will depend on the market itself. We should respect the market and its choices."

"Actually... we could give it a try," Lao Zhang said. "In terms of market activity, Baofeng Technology's stock is definitely better. However, in terms of the stability of its internal chips and potential selling pressure, Changying Precision seems to be better. Also, Changying Precision's stock has a significantly higher turnover rate. I think the probability of a limit-up is higher. It's probably just missing that spark."

"Who is willing to start this fire?" asked Old Wu.

Xu Qiao chuckled and said, "Let's wait another ten minutes, until market sentiment stabilizes and the turnover rate of Changying Precision stock is more sufficient. If no one else tries to ignite the fire then, I will." (End of Chapter)