Rebirth of the Capital Legend

Almost instantly, the major infrastructure sector, which has garnered the most attention from market investors, saw a surge in activity. Thanks to the immediate limit-up opening of the stock "Beijiang Jiaojian," a large number of active short-term funds converged on this sector. Among them, stocks such as Tianshan Cement, Shougang Group, Chongqing Development, and Financial Street saw their prices rise by more than 3% in just a few seconds.

Meanwhile, the smartphone supply chain, especially the Apple concept stocks, which were supported by continuous positive expectations and performed well in the pre-market auction, saw a surge in short-term funds, with many popular stocks attracting significant market attention, such as Changying Precision, Xinwei Communication, Goertek, and O-Film Tech.

However, this strong upward trend is definitely weaker compared to the large-scale infrastructure sector.

As for the new energy industry chain, which is also one of the three hottest themes in the market recently, the trend at the beginning of the trading day was quite divergent.

Several stocks, including Tinci Materials, Tianqi Lithium, and Ganfeng Lithium, are showing strong performance.

With continued buying support, it continued to rise and break through resistance, showing an accelerated upward trend.

However, the performance of other related concept stocks and other concept sectors was clearly unsatisfactory, especially the automobile manufacturing sector, which opened with a downward trend.

Other defensive sectors that have also garnered significant attention include liquor and white goods.

Their performance at this moment is somewhat unsatisfactory.

Overall, after the market officially opened, it maintained a fluctuating trend and did not make a positive upward breakthrough.

In addition to these popular main sectors that have received a lot of attention from investors in the market.

Some relatively weak leading sectors in the market.

For example, the main sectors such as internet software, internet applications, film and television media, semiconductors, electronic information, agriculture, and animal husbandry showed a weaker performance compared to yesterday's market trend and the trend during the pre-market auction. The core stocks in these main sectors also performed poorly.

Stocks such as LeTV, Baofeng Technology, Wanda Film & Television, Netspeed Technology, Huaxin Communications, and Wens Foodstuff Group, etc., generally showed a trend of continuously weakening active buying and continuously strengthening selling at the beginning of the trading day. It seems that the internal holding groups were attracted by the market trend of the three core main lines of infrastructure, new energy industry chain and smartphone industry chain, and thus sold off and shifted their positions to follow the trend.

Of course, this applies to all the weaker main storyline areas.

There are also a few stocks that manage to buck the trend and surge despite significant positive news.

However, the performance of these few stocks cannot drive the entire sector, nor can it reverse the weak trend of the main theme, and it cannot form a linkage between the sector and the main trend.

Meanwhile, in the Hong Kong stock market, which is also in the initial trading session...

Correspondingly, a number of mainland property stocks, as well as stocks related to the entire real estate industry chain, are still actively rising and breaking through after a sustained short squeeze in the previous period.

Among them, leading stocks in the mainland property sector, such as Hengda Real Estate, Rongchuang Real Estate, Country Garden, and Longfor Properties, once again hit new highs at the start of trading. The buying power on the market remained very strong. Basically, as long as the stock price pulls back slightly, countless buying funds will rush in to grab shares and continue to push the stock price up.

Amidst the continued strong performance of the entire real estate industry chain in the Hong Kong stock market, with a constant stream of proactive buying, the market is experiencing a challenging environment.

A number of mainland property stocks in the A-share market, as well as the entire real estate industry chain and even the major infrastructure theme, are further siphoning off active funds from the entire market.

Among them, Beijiang Jiaojian continued its strong upward trend, hitting the daily limit. The amount and number of buy orders at the limit increased as the trading day progressed. Judging from the situation, it is unlikely that the limit will be broken or the stock will be knocked down within the day.

The continued limit-up of Beijiang Jiaojian stock has created room for short-term speculation.

Within the real estate sector, as well as the building decoration and building materials sectors.

Other small and mid-cap concept stocks also began to rise rapidly, and a large number of short-term active funds in the market further gathered in this field.

At 9:33, influenced by the surge in the price of Beijiang Jiaojian (北疆交建) to its daily limit.

Taihe Co., Ltd., a real estate company, was suddenly pushed up by a large buy order of more than 100,000 lots, breaking through the 3%, 5% and 7% mark and quickly approaching the daily limit.

Meanwhile, stocks of companies such as Shougang Group, Financial Street Holdings, Chongqing Development Group, and Gemdale Group also rose rapidly.

Furthermore, a host of leading stocks in the real estate sector, such as Kewan Real Estate, Poly Real Estate, China Merchants Shekou, Greenland Holdings, Xinheng Holdings, and Seazen Holdings, have also begun to show unusual upward movements, following the upward trend and continuously siphoning liquidity and buying funds from other sectors.

Of course, this also applies to the architectural decoration and building materials sectors at this moment.

A host of infrastructure stocks with "Hua" in their names, such as Huaguo Construction, Huaguo China Construction, Huaguo Railway Construction, Huaguo Communications Construction, Huaguo Metallurgical, and Huaguo China Railway, as well as core stocks in the cement sector, such as Huaxin Cement, Conch Cement, and Huaxin Building Materials, are also rapidly rising in tandem.

Driven by the strong performance of these stocks...

At 9:34 AM, the real estate sector index rose to 1.5%, while the building decoration and building materials sector indices also rose to around 1.65%. The major infrastructure sectors continued their strong performance from the pre-market session, leading all industry sectors in both Shanghai and Shenzhen stock exchanges.

At the same time, the entire infrastructure construction theme excessively siphoned off market liquidity and active capital flows.

This resulted in a situation where there wasn't much new capital entering the market.

In other words, with the market still in a zero-sum game, other relatively strong sectors related to the new energy industry chain and the smartphone industry chain are now showing further divergence and are no longer able to form a general upward trend.

At the same time, the main consumer sectors, such as liquor, white goods, and retail, which were already in a relatively strong position, are also affected.

After funds were siphoned off by the major infrastructure construction theme, the market has now shown a slight downward trend, with insufficient active buying and a significant increase in active selling.

As for other weak sectors...

Stocks in key sectors such as film and television media, internet software, internet applications, agriculture, animal husbandry, electronic information, and communications, including both heavyweight core stocks and small-cap and micro-cap concept stocks, are continuing to weaken after being further drained of funds by the major infrastructure theme.

The three main sectors are film and television media, internet software, and internet applications.

They have been completely abandoned by active funds in the market and mainstream institutional funds. On the market, the corresponding stocks are showing signs of exhaustion in buying and selling pressure, with no initiative to resist whatsoever.

At 9:35, with the major infrastructure sector continuing to strengthen and Beijiang Jiaojian completely hitting the daily limit, and Oriental Yuhong, a leading stock at a high level, also opening up space again and creating a new annual high.

Overall, the two main sectors, the new energy industry chain and the smartphone industry chain, which have attracted a significant amount of buying funds, are still showing further divergence in their performance.

However, this refers to the core leading stocks within these two sectors.

Stocks such as Tinci Materials, Changying Precision, Lixun Precision, Ganfeng Lithium, Tianqi Lithium, and Do-Fluoride Chemicals, which have garnered significant attention, continued their upward trend amid a favorable short-term trading environment and heightened market sentiment for short-term speculation.

Of course, the upward trend of these high-profile, leading stocks is no longer enough to drive the entire main sector or other related concept stocks higher.

This also illustrates that, given the divergence in the trends of these two main themes, the leading stocks have already reached a stage where they are separated from the sector.

There was no sustained correlation with other related concept stocks in the sector, nor did the sector's trend follow suit.

It's not optimistic how long this counter-trend upward trend, driven by a favorable short-term speculative environment and pure bullish sentiment, can last, or to what extent it can strengthen independently.

"Judging from this situation, the stock of Beijiang Jiaojian, and the entire infrastructure theme, should have stabilized, right?" Five minutes after the market officially opened, seeing that the overall market trend had gradually stabilized, Zhao Zhiyuan, a member of the 'Shandong Gang' group of major speculative investors, kept his eyes fixed on the market trend and said, "As long as Beijiang Jiaojian can stabilize and the leading stock doesn't collapse, then the market today won't be too bad. I feel it's appropriate to continue to increase positions. Although it's not possible to buy Beijiang Jiaojian, speculative buying along with the leading stock should still be possible."

Hearing Zhao Zhiyuan's words, Zhang Wei nodded slightly and said, "At the moment of the market opening, the market was actually quite polarized. I remember when the limit-up order for Beijiang Jiaojian stock was momentarily loosened, but then, in the Hong Kong stock market, the entire infrastructure industry chain and the core mainland property stocks related to the real estate industry chain quickly reached new highs under the push of aggressive buying. This caused Beijiang Jiaojian and the entire real estate industry chain in the A-share market to stabilize quickly. Now, Oriental Yuhong stock has already broken through from a low opening and is showing a further breakout trend."

Under these circumstances, it's unlikely that the large-scale infrastructure sector will fall today.

As long as this core market theme remains stable and the shareholding structure is further consolidated, the market will not collapse too much.

Furthermore, the Shanghai Composite Index has actually been fluctuating around 3100 points for quite some time.

Here, the downward momentum is still somewhat insufficient.

In that case, it would be perfectly acceptable to increase the position size further.

However, although the infrastructure sector continued its strong performance today, with many popular stocks breaking upwards, the performance of other main sectors was somewhat below expectations, and even contradicted the hot sentiment surrounding infrastructure.

I feel that even if I were to trade, there are very few directions I could take.

We must focus on the major infrastructure sector. Other key sectors, even the relatively high-profile new energy industry chain and the smartphone industry chain, involve chasing after popular leading stocks, which carries significant risk.

“Yes, indeed.” Liang Jiucheng chimed in, “Looking at the overall market trend, the new energy industry chain and the smartphone industry chain are clearly diverging today. Apart from a few core leading stocks, other concept stocks are experiencing a net outflow of funds, with insufficient active buying. Under this trend, speculative long positions don’t seem to have a high success rate.”

Also, it seems that Shuguang Shares, which has been hitting the daily limit since last week, is now a leading stock in the new energy industry chain.

There has been a sustained increase in trading volume.

This stock might experience a sudden drop in price this afternoon when the overall market sentiment weakens in certain areas.

If this stock price suddenly drops, it's likely to have a significant impact on the new energy industry chain.

It's possible that the entire bullish market environment, as well as all the leading stocks at high levels, will be affected. So... slightly increasing positions and following the trend for speculation is acceptable, but heavy positions are not advisable.

While the probability of a sharp drop at this level is low, the probability of continued adjustment is relatively high.

Meanwhile, the possibility of the Shanghai Composite Index breaking through 3100 points in the near future is also not high.

Since the upside and downside potential is limited, and the index is expected to fluctuate between 3000 and 3100 points for a long time, there is no need to be in a hurry.

In today's market, there are basically only localized opportunities.

There are no unilateral opportunities to be made.

Therefore, maintain sufficient patience and don't rush things. Keeping a one-third position is enough, in my opinion.

"Yeah, I also feel that Shuguang Shares is a hidden time bomb," Zhang Wei nodded and said. "Currently, there are quite a few investors in the market who are optimistic about Shuguang Shares, but... I think the probability of this stock restructuring is actually not high. After all, its market value is quite large, and the number of shares is also too large. Also, the speculation is a bit nonsensical. An unconfirmed positive expectation has brought out so many limit-up days. Without a strong enough positive expectation later, it is difficult for other major funds to be willing to take over at high prices and continue to speculate. Anyway, I feel it is quite difficult. Although the market enthusiasm for this stock is not bad, regardless of whether the limit-up is lifted or not, I will definitely not take over this stock."

"Without a doubt, once the limit-up of Shuguang Shares is broken, it will basically be the recent top." Zhao Zhiyuan agreed with the two men's assessment and continued, "However, I think that Shuguang Shares' position in the current market is not that important. The collapse of this stock should not have a significant impact on the overall bullish sentiment of the market. After all, the current short-term sentiment in the market is mainly concentrated on stocks such as Beijiang Jiaojian, Dongfang Yuhong, Changying Precision, and Tianci Materials. As long as these stocks do not collapse in tandem, I think this short-term speculative environment can continue for a while."

At least for Beijiang Jiaojian, the current absolute core leader in the market, there is no sign of a sentiment gap.

There are no signs of a market peak.

If this stock can stabilize, then market sentiment will most likely stabilize as well.

And without a doubt, the stock of Beijiang Jiaojian should be in the process of accelerating right now, in just the first few minutes after the market opened.

At least seven or eight stocks have followed the trend from last week.

With so much capital involved, there's no reason why the market would suddenly stop flowing, right?

Furthermore, I believe that as long as you focus on the core themes, even if the entry point is wrong, there will still be opportunities to exit with these core leading stocks, no matter how many there are.

Even if a new high is temporarily reached, there will definitely be an opportunity to exit the market by stopping losses on a subsequent rebound.

Moreover, in a market environment characterized by differentiation and weakness, and within the overall existing capital game, funds tend to concentrate more on the direction of market operations.

Given that, I don't think there will be any problems focusing on the core themes when making investment decisions.

Oh, by the way, what do you two think of Changying Precision, Lixun Precision, and Tinci Materials? I think these stocks are also performing very well.

Moreover, the stock price movement of Lixun Precision is significantly more independent.

This is really reminiscent of the stock price movement of Oriental Yuhong back then. Buying pressure is endless, making it virtually impossible for the price to fall. Although the market capitalization and free float of this stock don't quite fit my trading style, given this price movement, I'm tempted to buy some shares.

“The stock performance of Lixun Precision is indeed ridiculously strong,” Zhang Wei said. “It feels like there are really long-term institutional investors operating in this stock, and its future prospects seem to be the best among all the smartphone supply chain companies.”

"In the smartphone supply chain, if we're talking about strong performance and high independence, Lixun Precision is indeed the strongest stock," Liang Jiucheng said. "If we're talking about potential upside, then it should be Changying Precision, right? This stock has only recently entered Apple's supply chain, and its future business development is basically all incremental business, so there's a lot of room for performance improvement. In fact, I feel that there should be a group of long-term funds operating in Changying Precision. This trend doesn't seem entirely like a relay trading strategy by speculative capital."

Zhang Wei nodded and said, "Everyone says that the current market trend of the entire smartphone industry chain, especially the Apple supply chain, is driven by speculation about the upcoming Apple product launch this year. But looking at this trend, I feel that the funds are really speculating on this line more like speculation about the expectation of an industry cycle reversal. The Apple product launch should just be a point to ignite medium- to long-term expectations, right?"

Zhao Zhiyuan pondered for a moment and said, "You know what, it's quite possible. Logically speaking, with the Apple product launch event approaching, the entire Apple supply chain and the main trend of the smartphone supply chain should see the realization of positive expectations and a trend adjustment. But looking at the trend, it seems that there are not obvious signs of funds withdrawing from the entire smartphone supply chain and the Apple supply chain. Moreover, the core stocks, such as Lixun Precision, Changying Precision, Goertek, O-Film Tech, Lens Technology... these stocks seem to have funds continuously buying them when the stock prices pull back."

"So..." Liang Jiucheng paused, then said, "Judging from the market trend and the depth of capital involvement, I think that among the major themes where the main funds are currently concentrated, the smartphone industry chain is clearly more stable in terms of trend and future expectations than the new energy industry chain, and it is also a more noteworthy area for investment." (End of this chapter)