Rebirth of the Capital Legend

"It's unlikely that market volume will break through one trillion yuan again in the short term," Zhao Qiang said. "Putting aside the issue of macro liquidity, let's just look at the current relationship between the stock market and the real estate market. The comparison of their profitability shows that large, active investors prioritize real estate speculation over the stock market."

Old Qian chuckled and said, "So, I'm saying that we should be cautiously optimistic about the market trends at this stage. However, that's overly optimistic. After all, it's obvious that with the massive capital siphoning off into the real estate market, it's difficult for the market to improve."

"Historically, there have been times when the property and stock markets have risen in tandem, moving in the same direction," Sun Chengyu said. "For example, during the bull market of 06 and 07, the property market was also quite profitable, and the real estate market experienced explosive growth."

Lao Qian thought for a moment and continued, "That's still a little different. The property market and real estate at that time were relatively small. So even though the macro-liquidity easing policy was very general at that time, it didn't affect the stock market too much, nor did it excessively siphon off the overall macro-liquidity.

Now, the scale of the entire domestic real estate market and the scale of projects in the real estate development sector are several times larger than they were back then.

When the market size has expanded many times.

The current real estate market, real estate development, and even the entire real estate industry chain related industries cannot possibly not affect the macro-level liquidity issue.

Also, the size of the stock market today is completely different from what it was back then.

How many stocks were there in the entire Shanghai and Shenzhen stock markets back then? Now, there are almost 3000 stocks. The number of stocks and the overall circulating market value have increased several times compared to the beginning.

In this case, the stock market must achieve a bear-bull transition and embark on a long-term upward trend.

It simply won't work without a large amount of incremental funds.

The current market has long passed the time when only a small amount of funds were needed to concentrate on the market and continuously guide it to create a magnificent money-making effect.

Now, if we want to form a sustained bullish force, the amount of buying funds required will be much larger.

Obviously, before the central bank takes practical measures and truly releases market liquidity, there will not be so much expected incremental funds entering the stock market for investment.

The underlying logic behind the stock's rise is the continuous influx of buying.

Without buying, there is no market.

That's why I say that at this stage, while the index is likely to maintain a sustained rebound for a while, potentially reaching 3200 or even 3300 points, it's essentially impossible to truly recover from the losses suffered during the third round of the stock market crash at the beginning of the year.

Zhao Qiang thought for a moment and continued, "Let's not worry about that for now. I think we should focus on the current hot market themes and the corresponding strong and popular stocks. We can only take one step at a time and see how the index moves and where the final rebound will land."

"Yeah, I agree." Sun Chengyu said, "Follow the trend, don't predict the trend."

Accompanied by the heated discussions among the core main speculators in the "Yuhang Group" main speculator group.

At this moment, in the internal group of the main speculators of the "Fushan Group", which has a large-scale layout and is long in the core main field of the smartphone industry chain, the discussion among several core main speculators is also very heated.

"I had thought Changying Precision would show even stronger momentum today," said Li Jinshi, a major investor in the Fushan Group who holds a large position in this stock. He sighed and said, "I didn't expect it to be held back by Beijiang Communications Construction in terms of performance."

Chen Guiyun heard this and responded with a smile, "Originally, Beijiang Communications Construction was positioned just ahead of Changying Precision, right? I don't think this is a blocking position. Furthermore, although Changying Precision didn't hit the upper limit at the close today, its overall intraday trend is still strong, right? There's a chance this stock will continue to strengthen and hit the upper limit tomorrow."

"Indeed." Liao Guoxiang responded at this time, "Judging from the trend of Changying Precision's stock, the chip structure has not been dispersed, and the large number of short-term capital groups gathered in the market are not in a hurry to exit. This can also be seen in today's Dragon and Tiger List trading data. In addition, the trend of this stock has not been disrupted.

The reason why this stock did not hit the daily limit today is mainly due to the overall market sentiment and the poor performance of other major main lines.

If the market sentiment was a little better today, this stock would have hit the daily limit in the afternoon.

However, it’s actually pretty good that there is no limit on the market.

On the contrary, if sentiment is not supportive and the sector cannot resonate with it, forcibly investing funds to close the stock will most likely overdraw the stock's subsequent long potential, resulting in the trend of Huawen Online over the past two days. It is better to maintain a strong and volatile situation, rising without closing the stock.

Chen Guiyun said: "I agree with Lao Liao's statement. Sometimes, for a core leading stock, a forced limit-up is not necessarily the strongest or the best performance. Some limit-up days are a manifestation of continued strength of long funds, while some limit-up days are a manifestation of the market's last gasp.

At present, the stock of Changying Precision has not reached the stage where the bullish momentum is exhausted.

On the contrary, judging from the current situation.

Changying Precision stock is still in a situation where bullish sentiment continues to ferment and bullish power continues to grow. I think there is no need to worry too much about this stock.

In fact, this line of today's smartphone industry chain.

Although the strength of the market trend is slightly weaker than the main line of large infrastructure and the main line of the new energy industry chain, it can be seen that it is still significantly stronger than other main sectors of the market. Looking at the post-market Dragon and Tiger List buying and selling data, various capital groups are also continuously optimistic about this line and are continuously increasing their positions to go long.

Anyway, I didn't sell a single share of Goertek stock today.

Compared to the performance of Changying Precision, isn't Goertek's stock performance even weaker? But I feel like this stock's rally hasn't run its course yet, and neither has the entire smartphone industry chain's main line.

"In that case..." Li Jinshi said, "Am I worrying too much?"

Chen Guiyun responded with a smile: "You're obviously overthinking it. Just hold on to it. We need to change our mindset a bit and learn from President Su to hold on longer and be more resolute. Anyway, I've figured out the current market trend. The funds that are being concentrated and speculated on are actually based on the logic of performance expectations, growth expectations, and changes in industry fundamentals."

"Yes, that's true." Liao Guoxiang nodded and said, "The previous pure concept hype is indeed not working well anymore."

"Brother Liao, have you taken some profits on your Lixun Precision stock?" Li Jinshi continued to ask. Liao Guoxiang smiled and replied, "I'm still holding it, not a single share. I don't think the market sentiment for Lixun Precision has reached a point where it's time for a reversal. There aren't many stocks in the market with stronger performance than this one, and its market popularity and attention are still rising. Judging from the sentiment, more and more people should start paying attention to this stock in the future."

With more and more attention, more long-term capital groups should get involved.

In this way, the potential buying power will remain strong.

In addition, there seems to be a rumor that Mr. Su's "Huayi Capital" institution is involved in this stock. I think the subsequent market performance of this stock should continue to develop.

Wait until the sentiment towards this stock begins to decline, and the attention and discussion heat begin to wane.

It’s not too late to leave the market and take profits.

Right now, all kinds of expectations are still there, and the corresponding expectations are still growing. There is no need to cut profits and exit the market now."

"Brother Liao is still calm. A large investment of hundreds of millions of yuan doesn't affect his mood too much." Chen Guiyun smiled and took over the conversation, "The market discussion and attention on Lixun Precision's stock have indeed increased rapidly. I feel that the main upward trend of this stock has just begun, and there is still a lot of room for further development.

Moreover, this stock has become the core leader of the entire smartphone industry chain.

The performance of other concept stocks related to the smartphone industry chain mostly depends on the performance of Lixun Precision.

I'll see how the stock performs tomorrow. If there's an intraday correction in Lixun Precision, I'll shift my position from Goertek to Lixun Precision."

Liao Guoxiang said, "The stocks of Goertek and Lixun Precision actually follow the same logic and have similar trends. I feel like switching them is unnecessary, right?"

Chen Guiyun said: "The two are naturally highly correlated in terms of their trends, but I have found that when the index and the corresponding sector index fall and adjust, the plunge of Lixun Precision is always smaller than that of Goertek. At the same time, when the market index and the corresponding sector index are also improving, the increase of the two stocks is similar.

And, in comparison...

The market popularity and investor discussion of Goertek's stock are still a bit low, and the corresponding long-term funds' attention is limited.

At present, the overall market liquidity is still not very abundant.

Without sufficient market attention and heated discussion, the market trend will be much weaker than that of the corresponding core leading stocks.

Also, at first glance.

Goertek, O-Film Technology, Sunway Communication, Micro-Brain... and other main stocks in the smartphone industry chain.

It follows the market trends of Changying Precision and Lixun Precision.

In this case, it is better to concentrate positions on these two core leading stocks. After all, the real defense is offense.

As the market is likely to enter a period of low sentiment and risk aversion will gradually increase, it is safer to hold on to core leading stocks."

"It's not wrong to focus on core leaders." Liao Guoxiang nodded and said.

"By the way, what do you two think of Beijiang Communications Construction?" Li Jinshi paused and asked, "It seems that after the Dragon and Tiger List data of the two markets came out, the market popularity of this stock has skyrocketed. It is now the most popular stock in the two markets."

Chen Guiyun thought for a moment and said, "I think the momentum of Beijiang Communications Construction's stock should be stronger than that of Huawen Online. It's also clearly better capitalized, and the divergence in the market trends over the past few days has been smaller. Judging from today's Dragon and Tiger List trading data and the heated post-market discussion, tomorrow's market trend for this stock should be relatively optimistic."

"I agree." Liao Guoxiang nodded and said, "Beijiang Communications Construction's stock is still worth paying attention to. First of all, the underlying logic of the large-scale infrastructure line is not bad, with medium- and short-term expectations and continuous positive news. Of course... the most important thing is that the large-scale infrastructure line has played a strong enough profit effect in recent months. This makes it easy for various funds in the market to form a consensus on this line and form a unified long position.

However, although the stock of Beijiang Communications Construction is currently worthy of attention.

But as for this stock, after having already risen for four consecutive days, we will have to wait and see how much room it can continue to expand upward.

Compare this with the stock of Huawen Online.

Then I think the performance of Beijiang Communications Construction's stock is indeed much stronger.

In addition, the strong and concentrated outbreak of the main line of large-scale infrastructure in the Hong Kong stock market today is also very likely to become a catalyst for the main rise of the corresponding stock market in the core sector of large-scale infrastructure in the mainland market.

Regarding this point, we should pay attention to the performance of the major infrastructure line in the Hong Kong stock market tomorrow.

If the Hong Kong stock market trends tomorrow, the core stocks in the real estate sector that performed extremely strongly today can continue to break through and soar.

This line is very worthy of attention.

On the contrary, the new energy industry chain, which is a sector that many investors are optimistic about after the market close, I feel there is a high probability of adjustment tomorrow."

"Is there a high probability that the new energy industry chain will adjust tomorrow?" Li Jinshi was a little skeptical when he heard Liao Guoxiang's words. He said, "But looking at the trend of the new energy industry chain today, it is indeed the strongest line in the market. It is also the line that the most active capital groups in the market are buying most actively and buying the most chips. Logically speaking... today's new energy industry chain line is just an intraday divergence. There is a high probability that it will return to consensus tomorrow and have the opportunity to strengthen further."

Liao Guoxiang said, "Analyzing according to normal market logic, it is indeed as you said. However, there's a difference today: the overall market sentiment was quite poor, and the Shanghai Composite Index ultimately closed below 3100 points. When the expectation of a breakout quickly diminishes, and many investors' willingness to chase higher prices weakens, then the new energy industry chain, which didn't see a significant correction today but showed considerable divergence in the market, will likely see a further decline tomorrow as sentiment weakens." (End of Chapter)