Rebirth of the Capital Legend

"Holy crap, is the smartphone industry chain really that strong?" Zhao Qiang, one of the Yuhang group's major speculators, noticed that more and more stocks in the smartphone industry chain were hitting their daily limit, and that Lixun Precision, a core stock, had also been snapped up by a large number of investors. He stared at the market with a look of obvious surprise. "It's surprising that Lixun Precision, with such a large circulating share capital, could even be snapped up by investors and hit the daily limit. Besides, the core Apple industry chain stocks are performing very well. Judging by the buying activity on the market, it seems that a large number of institutional investors are continuously investing in this sector."

"Yeah, I've noticed this too," said Lao Qian, a member of the group. He nodded and said, "In the entire small- and micro-cap and micro-cap stock concept theme sector, the smartphone industry chain is currently the main sector with the strongest combined strength from various market capital groups, aside from the new energy industry chain. Furthermore... it can be seen that the buying capital groups attacking this sector, this main line, are not all short-term capital groups within the market. There are also a large number of major institutional capital groups. It seems that many of these institutional capital groups within the market are significantly increasing their holdings in this direction."

Sun Chengyu then took over and said, "This isn't surprising. The smartphone industry chain is currently the main sector in the market with relatively high near-term expectations, and the fundamentals are gradually reversing. Logically, this is in line with the continued adjustment and increase in holdings by the main institutional investors in the market."

"What Brother Sun said is clear," Zhao Qiang said. "I just didn't expect it to be so strong. Now it seems... the core sectors of the emerging industry chain, such as film and television media, internet software, and internet applications, as well as other related concept sectors, are somewhat being abandoned by the short-term speculators in the market. Whether it's stocks like Huawen Media, Guangdong Media, and Quantong Education, or LeTV, Baofeng Technology, and Maruda Film and Television, the buying volume on the market is not high. The combined capital force is obviously much weaker than that of the smartphone industry chain. If it weren't for the breakthrough of the index this afternoon, driven by the main heavyweights in the market, I'm afraid these related industry sectors and concept sectors would have all suffered a significant correction."

"Yes." Lao Qian in the group nodded and continued, "What a pity for Huawen Online. We had originally thought that this stock's strong limit-up, especially after breaking through the previous high and going on a second wave of limit-up momentum, would drive the continued strength of related sectors such as film and television media, internet software, and internet applications, as well as related concept stocks, and open up upward speculation space, driving this line to become the next market trend. Unexpectedly... Huawen Online's check didn't even drive the entire sector or the entire main line to break through upward. Instead, it fell into a volatile trend that was significantly weaker than the index, and was abandoned by the entire group of short-term speculators in the market."

"The stock of Huawen Online is indeed a bit difficult to support on its own." Sun Chengyu nodded at this time and said, "Of course, the main reason is that the emerging industrial chain composed of film and television media, Internet software, Internet applications and other related industry sectors and concept sectors lacks strong underlying logical support and the expectation of a reversal in industry fundamentals. This makes it difficult for speculative funds to work together and form sustainability.

If you want to get out of this line...

In addition to the continued cooperation of market volume, a core weighted leading stock is also needed to lead the breakthrough.

Originally, the target of this leading group was LeTV, or one of the stocks including Quantong Education and Baofeng Technology.

But now it seems that these stocks are unlikely to get out of this situation.

In fact, the performance of Storm Technology's stock today is a bit regrettable.

If this stock can maintain its momentum in the morning and directly hit the daily limit with huge volume without breaking the board, it should be able to quickly gather the market sentiment to concentrate speculation on the emerging industrial chain and form a very strong concentrated profit-making effect on the market.

However, this stock was unable to stabilize after hitting the daily limit in the morning.

Of course, the short-term speculative funds that focused on this stock in the morning also lacked some courage after igniting the market. Otherwise, this stock should not have been occupied by the subsequent Changying Precision.

Now, after being occupied by Changying Precision.

The position of the entire film and television media sector has been completely replaced by the smartphone industry chain. In the future, the short-term capital groups in the market will only increasingly concentrate on the smartphone industry chain, and will not focus on the emerging industry chain.

However, although the performance of the film and television media sector was somewhat lower than expected, many stocks were unable to perform well.

In fact, the electronic information line, especially 5G-related concept stocks, is still very strong. I think that if the emerging industrial chain line is to come out in the future, the focus of capital attacks should be on 5G-related concept stocks. After all, compared with the film and television media, Internet software, and Internet application sectors with relatively high uncertainty, the future expectations of the 5G sector are still quite strong and relatively certain.

Moreover, after the breakthrough of 5G technology, it is in the process of commercialization.

It will also rapidly promote changes in the industry fundamentals of Internet software, Internet applications, and even the film and television media sectors.

Overall, the main lines of the entire emerging industrial chain are actually interrelated. If funds want to speculate on this line, they should do so based on future development expectations.

Therefore, I think the electronic information sector, especially the 5G sector, is still worth paying attention to.

Of course, the electronic information sector and the 5G sector are also strongly correlated with the trends of the smartphone industry chain.

These sectors can be observed as a linkage.

I think...

The current major market lines actually have a relatively obvious sense of hierarchy.

The main focus of major infrastructure projects, as well as the new energy industry chain, is primarily driven by fundamental shifts driven by macroeconomic policy changes, which in turn have led to shifts in future expectations. This has attracted a large number of institutional investors to speculate on these sectors. The smartphone industry chain and the electronic information sector, as well as the film and television media, internet software, and internet application sectors, can actually be seen as a reversal of predicament. As for the future...

The future prospects of these sectors are quite good.

Moreover, compared with the main line of large-scale infrastructure, it is obvious that the smartphone industry chain, electronic information, Internet software, Internet application sectors, and even the entire main line of the emerging industry chain have more room for flexibility.

Of course, in my opinion, the fundamentals of these sectors have not yet reached a point where they can reverse.

At present, it is just related concept hype and expectation hype.

Therefore, the market trend is far less stable than that of major infrastructure projects and new energy industry chains, where fundamental changes have been clearly evident and whose performance is gradually reaching its maturity stage.

"Yes, I agree with Mr. Sun's statement," Lao Qian replied in the group. "Actually, overall, no matter which sector you focus on among these main themes, as long as you buy the core leading stocks, the returns won't be bad. It just requires rotation and a certain amount of patience. But besides these emerging industry chain sectors, I feel that the market's heavyweight sectors seem to be getting stronger and stronger, accelerating, especially the banking, white goods, and liquor sectors. There are basically no signs of a pullback. Regardless of the overall market hitting its daily limit, these sectors are slowly and steadily rising. This kind of steady rise in heavyweight sectors, constantly repairing the index, while at the same time, concept stocks, mainly the Shenzhen Composite Index and the ChiNext Index, as well as corresponding small and micro-cap growth stocks, show a clear rotation trend, even a continuous rotation trend. This makes me feel that the core investment direction and trend of the market are still focused on the core themes. Moreover, in the current market, short-term speculative funds like us no longer have much pricing power; we are just following the trend."

It's just that the positive market sentiment last Friday and today masked the fact that the main trend of small-cap and small-end stocks in the market was actually relatively weaker than the main trend of heavyweight stocks.

"The weighted main line is indeed trending well," Zhao Qiang said. "But to say that the weighted line is significantly stronger than the small and medium-sized caps and micro-cap stocks seems a bit far-fetched, doesn't it? Why do I feel that the main trend of the market is clearly shifting from the weighted main line to the small and medium-sized caps and micro-cap stocks?
The previous weight line actually showed that institutional funds were more concentrated.

And now, it is obvious that many major institutional capital groups in the market are showing signs of adjusting their positions and layouts in the direction of other main lines of the market!

Especially in the area of ​​major infrastructure projects, the signs of institutions building up positions in groups are very obvious.

Everyone has seen what happened with the major infrastructure sector before, right? Trading volume was sluggish, and individual stocks were mostly range-bound, making it difficult to form an independent upward trend. But look at it now... Within the overall major infrastructure sector, leading industry stocks and core concept stocks are generally experiencing higher volume and turnover rates than before.

Does this mean that the main institutional funds in the market are still holding on to the main weight line and still focusing on the speculation of the main weight line?
And now, look...

In addition to the large-scale infrastructure line, the market's two main sectors, the new energy industry chain and the smart phone industry chain, also have a large number of institutional main capital groups concentrated in building positions. At the same time, the leading stocks in the two main industries and a number of growth stocks with relatively certain performance expectations, their daily trading volume and volume performance are also booming. This situation is obviously that the core main institutional capital groups in the market are gradually spreading from the main line of large-scale infrastructure, as well as liquor, white appliances, medicine, consumption, electricity, finance, petrochemicals and other main line areas where institutional capital groups were more serious in the early stage, to multiple main lines, and the market is blooming all over.

Moreover, based on the divergence of the main line of the market, multiple points of development are emerging.

I can feel that the overall market development is continuing to improve. All main lines are continuing to generate money-making effects and attracting multiple attacks from both inside and outside the market. There are signs that the overall market's long and short patterns are gradually changing.

If this form and trend continues...

I feel that the market will likely experience a reversal with a high degree of sustainability and sufficient potential in the future, or a bear-bull market transition.”

"Talking about a bull-bear market transition is a bit too optimistic, isn't it?" Lao Qian in the group responded. "The current market volume has only reached the 6000 billion mark, while in the previous bull market, not to mention the combined trading volume of the two markets, even the daily trading volume of the Shanghai Stock Exchange was over one trillion. I feel that with this level of trading volume, it's a bit premature to talk about a bear-bull market transition. Moreover, can the macro liquidity support a fundamental change in the market trend?

Although the central bank sent positive signals to the market last Friday.

However, from a global macro perspective, with the Federal Reserve entering the interest rate hike channel, the central bank still has relatively few cards to play.

There is also the fundamental situation of major industries.

Now, aside from the major infrastructure sector, where fundamentals are clearly reversing and expectations are gradually being translated into performance, the other major market trends are still largely driven by concept speculation, lacking underlying logic and fundamental support, right?

We cannot be optimistic about the long-term market trend just because the market has been strong in the past two days.

We still need to look at the market calmly and observe and follow market trends calmly.

I think the positive news from last Friday has almost been reflected. As for how high the market will go in the future and how the core market lines will perform, it mainly depends on the concentrated efforts of the main capital groups in the market. If the main capital groups in the market have a high degree of recognition of the market trend, then the market can continue to rise. If the recognition is not very high, it will be difficult to maintain the market.

Also, although the Shanghai Composite Index has broken through 3100 points, it still needs to break through the platform comprehensively.

I feel that there is still a lot of room for difficulty.

Of course, the most important thing for me is the market volume.

The current macroeconomic fundamentals can only be said to have shown some signs of improvement under the favorable stimulus of the central bank. However, with the real estate and property markets always siphoning macroeconomic funds, it is still quite difficult for the stock market to attract more off-market funds to enter the market and improve the overall valuation.

What's more, it hasn't been long since the end of the last bull market.

Many stocks in the market haven't completely fallen through, and the internal chip structure has not yet undergone a real restructuring."

"I think what Lao Qian said makes sense," Sun Chengyu responded. "At this time, we can't be blindly optimistic, but we can't be overly pessimistic either. We still need to think calmly based on the specific market conditions. Rotating operations along the main line is the most important thing. Only by maintaining calm thinking can we avoid making mistakes in our trading strategies."

Among the main speculators of the 'Yuhang Group', several core main speculators are discussing continuously.

Market trading hours are still ongoing.

As trading continued, the Shanghai Composite Index continued to rise, and the overall market trend continued to improve towards the end of the trading day. (End of Chapter)