Rebirth of the Capital Legend

"It seems the market index and the performance of the leading stocks within each core strategy have been correcting, but the overall market's support remains quite strong." Noting that the Shanghai Composite Index, after falling back to 3100 points, has shown a resilient and volatile trend, and has stopped falling further, Li Jinshi, one of the major speculators within the 'Fushan Group,' pondered for a moment and said, "It appears the holdings within the major strategies haven't weakened significantly. The bulk of the selling is still driven by profit-taking accumulated over the past two trading days. Judging from this situation... after a brief correction, the market should be able to continue its upward trend."

"Yeah, I've noticed this too." Chen Guiyun nodded and said, "The overall market buying is still very strong."

"Old Chen, are you going to sell Goertek's stock?" Li Jinshi asked.

Chen Guiyun responded, "There's not much room for profit. Let me wait and see. The current trend of this stock is not bad, and the market is strong. I think we can wait and see. There's no rush to take profits. How about your OFI Technology? Have you sold it?"

Li Jinshi replied, "At the end of the morning call auction, I reduced my holdings a bit, but I didn't move my major positions. Although the smartphone industry chain's performance at the beginning of today's session was a bit weaker than the two core sectors of major infrastructure and new energy, there was buying activity. The follow-up by long-term investors in this sector was also acceptable. With expectations for Apple's new product launch, I think it's worth holding on. At this point, I feel there will be further speculation from other on-site funds on these core Apple-related stocks."

"Yeah, I think so too." Chen Guiyun nodded again, then asked Liao Guoxiang, "Brother Liao, what about your Lixun Precision? Have you sold it?"

Liao Guoxiang responded: "No, I just added some positions at the beginning of the trading session."

"Fuck, Lao Liao, you're awesome. You still dare to increase your holdings at this position." Li Jinshi said in surprise.

Liao Guoxiang chuckled and responded, "It just broke through the trend and is accelerating upward. Why wouldn't you dare add to your holdings at this point? Lixun Precision is performing much more steadily than over 95% of the market. I feel like institutional funds are already flocking to this stock, and it's likely to replicate the trends of stocks like Oriental Yuhong, Conch Cement, and Wanhua Chemical."

"Well, judging by the market volume and the influx of large orders, there are indeed quite a few large and very large orders for Lixun Precision," Chen Guiyun said. "Judging from the large orders, institutional buying of this stock is indeed very strong."

"It might be difficult to replicate Oriental Yuhong," Li Jinshi said. "But replicating Conch Cement and Wanhua Chemical is certainly possible."

"So, there's no need to rush." ​​Liao Guoxiang said.

"But it's clear that the performance of Goertek and OFI Technology isn't as strong as that of Lixun Precision," Li Jinshi said. "It seems the performance of these two stocks is largely influenced by the performance of Changying Precision. Changying Precision, for now, is performing fairly standard and hasn't exceeded expectations."

Chen Guiyun said, "Compared to the trends of other stocks in the market, the current performance of Changying Precision is quite strong, right?"

"Well, being able to maintain strong sideways fluctuations is indeed strong," Li Jinshi said. "But it's not as good as Oriental Yuhong, Beijiang Communications Construction, and the popular core leaders in the main line of the new energy industry chain. From this perspective, the priority of the short-term capital group in the market for speculation is clearly lower in the smartphone industry chain than in the main line of large-scale infrastructure and the main line of the new energy industry chain."

Chen Guiyun said: "This is natural and unavoidable. After all, the overall profit effect and sustainability of the major infrastructure and new energy industry chains are stronger than those of the smartphone industry chain. Therefore, the buying capital group is definitely stronger."

"Speaking of the new energy industry chain, it feels like Tianci Materials is showing some signs of improvement," said Li Jinshi. "Today's performance is clearly outperforming the others. It closed at the upper limit with the most decisive action, and the trading volume is just right. Furthermore, the stock's performance is quite active. I feel its future performance is likely to surpass that of Ganfeng Lithium and Tianqi Lithium."

"The Tianci Materials stock is indeed worthy of attention today," said Liao Guoxiang.

Chen Guiyun nodded and said, "I didn't expect this stock to come out on top. In fact, in the first two trading days, the stock's trend strength was very average. Although this stock also hit the daily limit in the first two days, it was not a straight limit. At that time, in terms of market trend strength, it was obvious that Ganfeng Lithium, Tianqi Lithium, Power Source, Pioneer Intelligent, Yinjie Technology...this group of stocks had stronger trends. But now, except for Ganfeng Lithium and Tianqi Lithium, the two core leading stocks that President Su has heavily invested in, the other stocks have fallen behind. The market divergence is quite serious, and the strength feels relatively average."

"That's not surprising," Li Jinshi said. "Based on past market trends, the core leading stocks often don't perform particularly strongly in the initial stages of a market surge, especially during the first and second boards. However, the core leading stocks that truly emerge tend to grow stronger as they go up. This is because the higher they go, the stronger the combined force of funds in the market becomes. Similar to the Oriental Yuhong stock mentioned earlier, you can see that its performance in the first stage saw both ups and downs, with repeated sideways fluctuations. Later, as market expectations for this stock gradually became more consistent, its performance became much smoother. Now... it's almost impossible to see any decent adjustments in this stock, forming a sustained upward trend."

"What a shame! I saw some unusual movement in Tianci Materials' stock this morning," Chen Guiyun said, "but I didn't have time to follow suit."

Liao Guoxiang said: "Generally speaking, stocks that suddenly rise like this will only be noticed after they hit the upper limit. If you haven't been watching the stock beforehand, it is generally difficult to keep up. Moreover, if the stock has not hit the upper limit before, the logic is obviously different from now."

“I missed it too,” Li Jinshi said. “I can only look at other stocks.” Chen Guiyun paused, then added, “What about Ganfeng Lithium and Tianqi Lithium? Do you two think they’re still worth considering? Their current market capitalization is smaller than Lixun Precision’s. But I feel that if we compare their future potential, once their expectations align, their potential won’t be much smaller than Lixun Precision’s. Moreover, with President Su helping to lock in their positions, I feel that other major institutional investors in the market will inevitably follow suit and lock in their positions on a large scale. This means that the actual upward pressure on these two stocks won’t be very high. I feel that these two stocks have the potential to break out into a strong trend!”

"I think it's worth buying," Li Jinshi said, "but I don't have any positions at the moment."

Liao Guoxiang said: "If you believe that these two stocks can continue to develop a strong trend, then you can buy them. On the contrary...if you don't believe in the long-term industry expectations and fundamentals of the new energy industry chain, then at this point in time when sentiment is at its peak, it is not worth continuing to short-term speculation."

"Okay." Chen Guiyun nodded and said, "Then I'll increase my position a little bit and give it a try."

Having said that, he did not wait for Ganfeng Lithium and Tianqi Lithium to fall back to their low points during the trading session, and directly bought nearly 1000 million chips at the market price.

"There were some things in the new energy industry chain that exceeded expectations today," said Li Jinshi. "But the trend in the major infrastructure sector seems to be quite standard today, with nothing particularly exceeding expectations. I think the market is a bit tired of this sector, and there's nothing particularly new to explore. If we want further stimulus in this sector, we'll probably have to wait for the third-quarter earnings reports of many of the leading stocks in this sector to be released."

"It looks like Beijiang Communications Construction will continue its upward push," Chen Guiyun said. "Is this a normal trend? I think, relatively speaking, the major infrastructure sector remains one of the strongest core themes in the market. At least institutional investors remain optimistic about its potential involvement."

Li Jinshi said, "Beijiang Communications Construction's stock has seen a huge amount of volume today. Even if it hits the upper limit, it's unlikely to see a premium tomorrow, right? Furthermore, it seems like the recent short-term stock speculation potential has been locked up by Huawen Online. Even if Beijiang Communications Construction continues to trade higher, it's unlikely to surpass the potential of Huawen Online, right?"

"That's not the case," Liao Guoxiang said. "In my opinion, each stock's performance should be viewed independently. If you analyze it with inertia, you'll easily miss out on promising stocks. Judging solely from the market trends and volume, Beijiang Communications Construction's performance today is acceptable. However... Huawen Online's performance today has set a bad precedent for other short-term concept stocks in the market. This stock clearly hit the daily limit yesterday, but today, with so much market capital rushing in, there's no room for a higher opening price. It's truly outrageous."

"I don't think Huawen Online's stock has any room for a premium today. The stock opened lower and continued to decline, showing a sharp decline, which is within expectations," said Chen Guiyun. "Yesterday's performance in the film and television media sector, including the entire emerging industry chain, was problematic. If you think about it carefully, you know that this stock is likely to fall further today as the sector adjusts."

"I was still affected by yesterday's trend of Baofeng Technology," Li Jinshi said. "If I have to say what's disgusting, yesterday and today's trend of Baofeng Technology are truly disgusting. Today it opened more than 5% lower, killing all the long funds that were taken over yesterday."

"That's true." Liao Guoxiang nodded slightly.

Chen Guiyun sighed, "If you ask me, the main force behind the blockade of Baofeng Technology yesterday should have been more aggressive and forcefully closed the market. That way, the losses might have been smaller, and it would have likely boosted sentiment in the film and television media sector. If Huawen Online hadn't collapsed, they might have been able to exit safely, or even make a small profit. Now... the main force behind the speculation on Baofeng Technology yesterday must have lost at least 7 or 8 million yuan before they were able to retreat safely."

"Under yesterday's circumstances, with speculation clearly trending downward across the entire emerging industry chain, a large number of short-term investors in the market were anticipating diverging trends within the new energy industry chain, which would likely siphon off active buying capital from other key sectors..." Li Jinshi said, "Old Chen, that's easy for you to say, but if it were you, would you have dared to place a stop-loss order under those circumstances? If you continued to invest more money and didn't achieve the expected results, you would have lost even more."

Chen Guiyun said, "If it were me who was investing in Baofeng Technology yesterday, I would have placed an order to close the gap. To be honest... the funds investing in Baofeng Technology lack both vision and courage. For these pure concept stocks, especially those that are severely oversold, you should either not invest in them. If you do invest, you have to act with all your might and directly create a strong profit effect. Otherwise... when a large number of trapped shares in the market pour out, you won't be able to catch them even if you want to. Moreover, for these oversold stocks that rebound, once they violently rise and are closed by strong large orders, the selling pressure on the market will be much smaller. Once you hesitate, the selling pressure will be several times greater."

"There's some truth to what Old Chen said," Liao Guoxiang responded. "When it comes to hyping up concept stocks, you can't hesitate. You have to do it all at once. If a large order had been placed to forcefully block the first limit-up yesterday morning for Baofeng Technology, it could have changed the stock's subsequent trend. It's very likely the stock would have hit two daily limit-ups. It's a shame... we weren't able to hold it back then."

"What a shame, it's probably Huace Film & TV's stock, right?" Li Jinshi said. "It clearly rallied yesterday, but today... it's fallen back down again."

Chen Guiyun said: "The logic behind the decline of Huace Film & TV's stock today is the same as that of Huawen Online. The reason is actually that the bullish sentiment in the film and television media and even the emerging industry chain is too poor. There is a lack of buying funds to follow the trend. In addition, the divergent trend of the new energy industry chain today has siphoned off too much active capital flow from other main sectors of the market. Looking at the volume feedback of the new energy industry chain at this point in time, the current volume of this line is basically more than double that of the same period yesterday. In particular, the automobile sector has seen the most severe increase in volume. For Changan Automobile, it has been trading for less than an hour, and the volume has reached nearly 1 billion yuan. It is a bit exaggerated."

"As for the complete vehicle sector..." Li Jinshi said, "I always feel there's not much room for imagination."

Chen Guiyun nodded and said, "I think so too, and I always feel that the capital group in the market does not agree with this line very much."

"That's because the certainty of expectations isn't as certain as in the lithium battery sector," Liao Guoxiang said. "Therefore, the performance and the willingness of funds to absorb the trend are much weaker. In the entire new energy industry chain, the core is actually the lithium battery sector. Focusing on the lithium battery sector is the safest approach. Choosing other non-core sectors might result in correctly identifying the main trend, but it's difficult to make a profit." (End of Chapter)