Rebirth of the Capital Legend

Finally, when the midday closing time arrived, the Shanghai Composite Index returned to near the flat position, while the Shenzhen Composite Index and the ChiNext Index showed a slight downward trend.

As for the core market sectors...

The main line of large-scale infrastructure and the main line of the new energy industry chain maintained a strong upward trend. The corresponding industry sector index and concept sector index all rose by more than 1.5% during the day, and the corresponding core leading stocks, such as Oriental Yuhong, Beijiang Communications Construction, Sugon Shares, Power Source, Tianci Materials, Dofluoro, Ganfeng Lithium, Tianqi Lithium... and other stocks also showed a big rise.

The performance of the smartphone industry chain is weaker than that of the major infrastructure and new energy industry chain, but they have also maintained an upward trend. Corresponding core leading stocks, such as Lixun Precision, Changying Precision, Goertek, O-Film Technology... and other stocks have all turned red and risen before the midday closing.

The main weighted sectors of the main board include liquor, white goods, medicine, consumption, electricity, finance, petrochemicals and other sectors.

Liquor and white appliances achieved strong growth, while other main sectors showed differentiated trends, with some fluctuating sideways and others showing a clear adjustment trend.

As for the emerging industrial chain, it is the main sector where most of the small and medium-sized and micro-cap concept stocks in the market gather, as well as its related concept sectors.

It includes three major sectors: film and television media, Internet software, and Internet applications.

All of them show a trend of adjustment.

Among them, the film and television media sector suffered a heavy blow today, leading the decline in the two markets. The two major sectors of Internet software and Internet applications were not much better.

In addition to the main core sectors that attract relatively high attention from these market investors.

There are also some main sectors that do not receive such high attention, such as restructuring and shell companies, free trade zones, animal husbandry, agriculture... and other main sectors.

However, the financial attention is still very limited.

The trends of related stocks are not very strong, and the loss-making effect on the market still exists.

Overall, in the morning's market trends of the two markets, although the index stabilized, the market's overall investment sentiment and investment confidence have rebounded compared to the early trading hours due to the main line of large-scale infrastructure and the core line of the new energy industry chain.

However, the overall market trend is still somewhat lower than everyone's expectations.

While the core main line shows a money-making effect, many other main line sectors in the market still have a certain degree of loss-making effect.

That is to say, the market showed a slightly shrinking trend today.

In the entire market, there is a divergence in the trends of the major main lines. It is also obvious that large capital groups and a number of major institutional capital groups in the market give priority to core main lines and core leading stocks in their choices.

"It seems that despite the small changes in the index, the market trend this morning is still quite divergent." After the midday close, He Zhong, a member of the Gusu-affiliated major speculators, stared at the frozen market conditions of the two markets. After a moment's reflection, he said, "The major infrastructure and new energy industry chains are performing well and are still maintaining a relatively strong momentum. However, the other main market trends are a bit weak. With the volume starting to wane, it feels like a market breakthrough is still lacking some momentum!"

Zheng Jinming nodded and said, "Indeed, apart from the major infrastructure sector and the new energy industry chain, the trends in other main sectors are rather lackluster, with not much profit-making effect reflected. Moreover, today's film and television media, internet software, and internet applications sectors are even experiencing quite a few losses. This shows that the market is still very divergent, especially when liquidity cannot be further expanded. Because the new energy industry chain has siphoned off too much active capital liquidity in the market, it has directly led to insufficient buying in other main market sectors. Many core leading stocks are simply unable to break out of this situation!"

"There's nothing we can do about it," said Lao Qian in the group. "The market has limited liquidity. If it's less here, it's more there. If it's more here, it's less elsewhere. Currently, the new energy industry chain is the strongest, so naturally, the active capital groups in the market will subconsciously flow into this line. It's human nature to seek profit and avoid harm. There's no way to change it. We can only follow it."

"There's no problem following," Zhang Xinlei said. "But after today's big divergence in the new energy industry chain, a lot of short-term buying potential has been overdrawn, right? I feel like even if this line doesn't adjust today, it will adjust tomorrow or the day after tomorrow. Today, this line has siphoned off active capital flows from other mainline areas, attracting a lot of funds that were unable to participate earlier and had insufficient positions to take over and buy. But what about tomorrow? Where will this line siphon off other buying orders? I think... even if you want to intervene in this line and are firmly optimistic about it, there's no need to buy heavily at this point when sentiment is so hot. I think there will be a good buying point after the sentiment subsides. Who knows... in order to consolidate internal chips, the entire new energy industry chain mainline may fall back to the position it started at last Friday."

"Even if there's an adjustment, it shouldn't fall back to last Friday's starting point, right?" He Zhong said. "There's no reason for it to fall back."

"No one can say for sure," Zhang Xinlei said. "I'm optimistic about the new energy industry chain, but I won't buy near the current peak of sentiment. I'll wait patiently for a more appropriate buying opportunity after market sentiment cools down."

"I think what Lao Zhang said is quite right." Lao Qian in the group took over and continued, "When the new energy industry chain line broke out last Friday, the start was too rapid. In fact, there are some problems with the bottom chip structure. If this line is to follow the long-term trend of large-scale infrastructure, after the current short-term enthusiasm, as the sentiment subsides, it is bound to fall back.

This can be seen by referring to the trend of major infrastructure in the past few months.

I remember that the line of large-scale infrastructure had experienced more than one retracement before a consensus expectation was truly formed and before the main institutional funds locked up their positions on a large scale. At that time, it fell back to almost the original starting point, and the market trend was extremely tragic.

Looking back now, how many people had the courage to buy at that time?
In hindsight, wasn’t that the best buying point?
When the bottom chip structure is not completely stable, especially when the internal chip turnover rate is seriously insufficient, I think that even if there are many large capital institutions involved in the new energy industry chain, it will not directly break through the trend and go up.

Another reason is that last Friday, there was a great positive news that led to a reversal of the fundamentals of the new energy industry chain.

The release was sudden.

Basically, before this good news was released, there was no general expectation in everyone's mind.

In other words, many large institutional investors who discovered the fundamental reversal of the new energy industry chain and the complete change in future expectations actually had seriously insufficient positions.

When the main funds of these large institutions are still insufficient in their positions.

At the same time, in the main areas of the entire new energy industry chain, most of the current holders are still retail investors.

This line cannot be achieved overnight.

Without repeated fluctuations, which allow a large number of retail investors in the market to hand over their chips, the stock price will not be pushed up directly in one go.

Therefore, there is a high probability that this line will pull back.

The extent of the pullback depends on the overall market trend. And in my opinion, the overall market trend is currently unclear and far less optimistic than the general expectation of the previous two trading days.

First, the Shanghai Composite Index is in the range of 3100 points to 3400 points.

It was after the New Year's Day this year when the market experienced continuous circuit breakers and the market plummeted.

In other words, the chips in this range are relatively disjointed, just like the core concept leading stocks in the market. When funds are massively withdrawn and sold, there are two consecutive limit downs with no volume. Generally speaking, there is a direct disjointed chip structure.

The first time this pressure range is touched, it is just to loosen the chips, not for a real breakthrough.

I think this is the current market trend.

Under the current situation, especially when the overall market liquidity has improved limitedly and the macro liquidity has not increased on a large scale, the Shanghai Composite Index does not have enough momentum to continue to break upward, that is, it is difficult to form a continued upward trend.

I feel that even if the Shanghai Composite Index temporarily stabilizes at 3100 points, it will once again form a relatively obvious box-shaped oscillation situation above 3100 points.

In fact, I really hope the market will go this way.

After all, there is a saying that goes, the longer the horizontal line, the higher the vertical line.

If the volatility here lasts longer and the chips are cleaned more thoroughly, the subsequent breakthrough will have sufficient strength and the trend will continue for a long time.

Otherwise, it will be too hasty to focus on breaking through upwards.

After consuming the market's already limited main bullish force, once market sentiment declines, both the index trend and the corresponding core leading stock trend in the market can easily fall back again, which is not conducive to the overall bear-bull transition in the future market.

It is also not conducive to changes in the market ecology and overall valuation improvements.

So, at the moment...

It would be more reasonable to look at range oscillations or differentiated rotation trends.

In the context of range-bound fluctuations and diverging trends, there is no need to rush to chase the highs of many leading stocks at high sentiment points.

"Old Qian's analysis makes sense," Zheng Jinming nodded and said, "I also think the overall market trend is a bit weak. Even if it can stabilize slightly today, it's hard to say what will happen tomorrow or the day after tomorrow. We shouldn't rush into the new energy industry chain. We should wait and see how the subsequent correction goes before making any follow-up moves. It would be safer to do so."

"What about the major infrastructure project?" He Zhong asked.

Zheng Jinming said: "There is currently no buying opportunity in the major infrastructure sector. This is a feast for shareholders. Whether it is Oriental Yuhong or the core leading companies such as Anhui Conch Cement, how can you buy them? They are all at corresponding high points, and there is no way to buy them."

"That's right." He nodded. "We don't know when the market will pull back. If we buy now, we might just buy at the high point of the periodic pullback."

"Speaking of Oriental Yuhong stock, how much room do you think it has left?" Zhao Xinlei asked. "I feel like it's already on a major upward trend. Judging from the K-line patterns, this trend is nearing its end, right?"

Zheng Jinming responded, "Everyone has said the same thing about this stock before, but judging by its trend, it's still very resilient. There's no sign of abating at this point. I suspect this stock will continue to rise, given that Mr. Su won't be reducing his holdings at Fuxing Road for the time being. However, it's definitely not a good time to buy at a high price."

"What about the Beijiang Communications Construction stock?" asked Lao Qian in the group.

Zhao Xinlei chuckled and said, "After the stock of Huawen Online went bankrupt, Beijiang Communications Construction has become a high-trading stock among short-term concept stocks. I am optimistic that this stock will continue to expand and move up, so I added some positions in the morning. After all, the sentiment in the major infrastructure sector is currently good, and institutional funds are following up well. In addition, the Hong Kong stock market is very strong today, especially the performance of domestic real estate stocks, which is simply a standard trend of continued strong breakthroughs.

There is good sentiment feedback on the main line of major infrastructure, and a large number of major capital groups follow suit and speculate.

There is also a situation led by the Hong Kong stock market.

I think that at this point in time, there is no reason for many short-term active capital groups in the market not to take over and hype the Beijiang Communications Construction stock.

Another comparison is with the stock of Huawen Online...

The industry sector in which the Beijiang Communications Construction stock is located, as well as the corresponding concept sector, can be unanimously recognized by more on-site capital groups at this time.

What's more, this stock has a very high market recognition and is very active.

And the selling pressure on the market is not great.

Given the opportunity to overtake Huawen Online and become the new market leader, there should still be major investors with a higher risk appetite willing to take a gamble, right?

"Well, I'm also optimistic about Beijiang Communications Construction's stock performance," said Lao Qian in the group. "It's just that after the violent fluctuations, the stock price has already risen, and there's no good time to buy in. Maybe after the midday sentiment ferments, the stock will go straight to the limit after the afternoon opening."

"If we're certain this stock has a high probability of selling out..." He Zhong said, "a few percentage points higher in cost wouldn't be a big problem. The key is that the strength of the major infrastructure investment sector isn't strong enough today. If funds were to pull Beijiang Communications Construction stock higher today, there's no guarantee it wouldn't replicate the trend of Huawen Online yesterday and today."

"They're still quite different, aren't they?" Zhang Xinlei said. "The infrastructure sector and the film and media sector are completely different in terms of their underlying logic and the overall market's consensus. I don't think you can compare them like that. It's obvious that the current market environment for Beijiang Jiaojian is better than that for Huawen Online yesterday. Also, the sentiment and performance of the infrastructure sector today are much better than those of the film and media sector yesterday. If Beijiang Jiaojian hits its daily limit today, it can be seen as a resonance with the sector's sentiment, but yesterday's limit-up for Huawen Online clearly deviated from the sector's sentiment." (End of Chapter)