Rebirth of the Capital Legend

"Logically, there are signs of a reversal, but in terms of sentiment and investor attention, there hasn't been much movement yet," Zhao Zhiyuan said. "Moreover, it seems that the major institutional investors in these two sectors haven't paid much attention to them either, and they're still in a relatively unpopular phase. But I think... given the low market attention and the strong expectation of a reversal, it's convenient for us to slowly select stocks with the potential to be hyped."

Zhang Wei thought for a moment and continued, "Indeed, the steel and coal sectors are still relatively unpopular. There are no stocks from these two sectors on today's list of top gainers and losers. However, if we're talking about stocks to watch... based on the recent performance of various stocks in these two sectors, the stocks with relatively active trading and less internal accumulation of shares, especially those with a lot of trapped capital, should be Bayi Steel and Pingmei Energy."

"I remember these two stocks showed synchronized movements when the real estate sector, and even the entire infrastructure sector, was experiencing a reversal, which was when 'Huayi Capital' initially built its position, right?" Liang Jiucheng continued, "Back then, these two stocks, along with their respective steel and coal sectors, were also linked to sectors like real estate, construction and decoration, and building materials. However, after various major funds concentrated on the real estate, construction and decoration, and building materials sectors, the steel and coal sectors gradually fell behind due to insufficient expectations and a lack of speculative sentiment. This led to these two stocks gradually falling back to their original levels after the first phase of speculation."

“That’s right.” Zhao Zhiyuan nodded and said, “Back then, the steel and coal sectors did indeed move in tandem with the overall infrastructure theme, and the stocks of Bayi Steel and Pingmei Energy also experienced a period of continuous speculation.”

Zhang Wei paused for a moment, then continued, "Judging from the current results, the speculative frenzy that occurred when these two stocks moved in line with the overall infrastructure theme has not been entirely without benefit to their subsequent market performance. From the perspective of the shareholding structure, the previous round of speculation loosened a lot of previously trapped shares, resulting in a situation where there are not many trapped shares left on the trading screen of these two stocks now."

“In that respect, that is indeed the case.” Liang Jiucheng nodded and continued, “Then let’s keep an eye on them for now. The current stock prices of these two stocks are very low. If the market trend moves towards the steel and coal sectors, I feel that the probability of these two stocks being hyped up again is still very high. As for whether they can soar to the sky and form a trend like Beijiang Jiaojian, it depends on the intensity of the sentiment when the wind blows.”

"I estimate that the unusual movements in the coal and steel sectors will stop when the clustering in the major infrastructure sector begins to stall and the market falls back into a sideways consolidation," Zhao Zhiyuan said. "It feels like when the clustering in the major infrastructure sector accelerates and sentiment picks up, it will be difficult for funds to pay attention to second- and third-tier sectors like coal and steel."

Zhang Wei responded, "It's impossible to predict when the wind will come. However, the current market liquidity is limited, and the positions of major funds are also limited. Logically speaking, given a certain level of liquidity, if there is no continuous supply of new liquidity from outside the market, then when the vast majority of major funds are still concentrated in the main sectors of consumption and infrastructure, it is indeed difficult for the steel and coal sectors, which are the second and third-tier sectors of the market, to attract strong attention from major funds and to obtain sustained active buying."

Following this logic...

For these two sectors to emerge from their bottoms and establish a sustained upward trend...

It's hard to say. Funds concentrated in these two main sectors might only consider switching between high- and low-level investments when they reach a high-level consolidation phase.

"No matter when this trend comes, all we can do now is keep a close eye on it and wait patiently," Liang Jiucheng said. "When the trend comes, the market will definitely show some clear signals, and then we can decisively intervene."

After speaking, Liang Jiucheng turned his attention to various stock trading forums across the internet, focusing on the changes in market sentiment after the release of the intraday trading data.

And so, under his watchful gaze...

At this moment, on major online stock investment platforms, countless retail investors are debating the published data on the Shanghai and Shenzhen stock exchanges' top traders, with many bullish and bearish views.

What's the daily trading data for Beijiang Jiaojian stock?

"This list looks good. The main funds in the market are still buying and supporting the stock. I feel that there is still room for Beijiang Jiaojian to rise."

"I also feel there is still room for growth. Among the funds that came out today, there were no funds from the initial positions that entered the stock of Beijiang Jiaojian. This shows that many major speculative funds in the market are still locked in, and only a small portion has left. Moreover, this turnover shows that the support is still very strong. There is no reason not to be optimistic."

"It hasn't even doubled in value since it hit the bottom, and you're already scared? It should at least catch up with the gains of Oriental Yuhong, right?"

"Catch up with Oriental Yuhong? That would require at least three consecutive limit-up days."

"This year, there haven't been any stocks with particularly high price increases that have become 'monster stocks' in the market. I feel that Beijiang Jiaojian might be the first 'monster stock' in the second half of this year."

"How much do speculative stocks typically rise?"

"Can a stock be called a 'monster stock' if it doesn't increase three to five times in value?"

"That makes sense. As long as the extreme loss effect occurs, we can just continue to lock in our positions."

"Generally speaking, the selling point for these core leading stocks is when they hit the daily limit down. It's not too late to sell once they start hitting the daily limit down."

"I think so too. It's still hitting the daily limit up, so there's no need to panic."

"I feel like Oriental Yuhong is still the best stock. It's really going all the way up, without any volume increase or pullback. It's just slowly rising, taking three steps and then looking back every three steps."

"It's better if the trading volume doesn't increase. Once the trading volume starts to increase, it means the stock price is about to peak."

"That's true. Only when trading volume doesn't increase can it be said that the trend is continuing."

"Oriental Yuhong stock is indeed strong. Speaking of which, Mr. Su from 'Fuxing Road' should still be holding onto this stock, right?"

"Of course. I didn't see any trace of Mr. Su selling his shares on 'Fuxing Road.' Moreover, Mr. Su has such a large position in this stock. If he were to reduce his position to take profits or exit the market, there would definitely be a significant increase in trading volume. That's why I said that continuous high volume means the stock price is about to peak, while continuous low volume means it definitely hasn't peaked yet. Holding it is very reassuring."

"It's just not a good time to get involved. At this price, I don't dare to put a large position at all."

"Is Oriental Yuhong stock still safe? People dare to invest heavily in Beijiang Jiaojian stock, so why don't they dare to do the same for Oriental Yuhong? To be honest, I feel that Oriental Yuhong stock is much more stable and safer than Beijiang Jiaojian stock."

"It feels like a pullback is imminent. If I'm heavily invested and get trapped, that would be bad."

"That's not how it works. To make money on truly good stocks, you have to actively buy them when they're already in a downtrend."

"Is that right?"

"That has to be the case. What's there to be afraid of when it comes to the most core leading stocks?"

"But from a technical perspective, the K-line of Oriental Yuhong stock is starting to show obvious signs of dulling. It feels like if there is a pullback, it won't be a minor correction."

"Isn't it normal for technical indicators to become dull? How can technical indicators not become dull in a major upward trend? It's hard to make money by trading stocks based on technical indicators. If you ask me, for core leading stocks like these, with such a long-term upward trend, you have to hold on to them. Only by holding on and protecting them can you make substantial profits. Otherwise, if you make a little profit and leave, you'll make money here and lose money there, and in the end, you'll have nothing to show for it."

"That makes sense. Sigh, holding on is better than anything else. I was too quick to take profits, and now I can't buy them back at all."

"I sold my shares in Oriental Yuhong and bought other stocks, but I still lost a lot of money. If I had known, I shouldn't have made any moves."

"I've said it before: once you've bought shares of a core leading stock, don't sell them easily."

"What a pity, it was too difficult to hold."

"Holding onto stocks is like being a widow; this is not just a saying."

"Both Beijiang Jiaojian and Dongfang Yuhong are good stocks, but they seem to be following different paths. Dongfang Yuhong is a leading stock in the trend driven by institutional funds, while Beijiang Jiaojian is a pioneering leading stock dominated by speculative funds."

"That's right. One stock is for exploring valuation and trend potential, while the other is for exploring consecutive limit-up days and speculative trading based on sentiment. Both stocks are core leading stocks in the major infrastructure theme. As long as the sentiment in the major infrastructure theme doesn't collapse, I feel that you can buy either of these two stocks."

"By the way, Taihe Shares is also a hot stock today, and its net buying amount ranks first on the list of top-performing stocks in both Shanghai and Shenzhen stock exchanges. What do you all think of this stock?"

"There are quite a few positive factors for Taihe Shares, but it only hit the daily limit for the first time today, so it's hard to say what the future trend will be."

"It's quite good that the first board has this much popularity." "I think the first board shouldn't have too much popularity, otherwise... if there are too many expectations in advance, it will be difficult to go far."

"That's true. Early consensus makes it difficult to achieve a full exchange of chips."

"Shouldn't we still need to see how the main storyline develops emotionally?"

"The sentiment in the infrastructure sector is okay today, but the sentiment in other major market sectors is terrible, especially in the film and television media, internet software, and internet applications sectors. Baofeng Technology and LeTV are almost at their daily limit down."

"Hasn't Baofeng Technology already hit its daily limit down?"

"This core bull stock from the last bull market probably has no future."

"Indeed, this stock has trapped quite a few people."

"There are just too many people trapped here. This company is really bizarre. They should just delist it already, otherwise the decline will never end."

"Compared to Baofeng Technology, LeTV's stock isn't much better. It feels like Jia Yueting doesn't tell the truth at all, and he wants to do everything, which seems like he's overreaching and hurting himself."

"I personally think that LeTV is a fraudulent company."

"It's not exactly a fraudulent company, but it's definitely not worth 70 or 80 billion in market value. It's probably worth 10 or 20 billion at most."

"That's about right. A reasonable valuation should be around 10 to 20 billion."

"It's hard to say. What if the model succeeds? Once the ecosystem is established, that could be a market worth hundreds of billions."

"How long have we been telling this story? Has it had any effect? ​​I think it's because we've been telling the story too much that the stock price isn't rising."

"Sigh, if it weren't for this heavyweight leader on the ChiNext board constantly dragging down the index, I feel that a lot of small and medium-sized stocks in the market wouldn't have fallen so badly."

"The sharp decline in small-cap and micro-cap stocks is due to a combination of factors, right?"

"Anyway, the current market trend is not towards small and mid-cap stocks. At this stage, we still have to buy large-cap stocks and heavyweight stocks."

"Maybe, but these are already high-weighted stocks, and their prices aren't low either."

"Yes, many leading stocks with heavyweight positions no longer have a valuation advantage, and their stock prices have risen significantly, making it difficult to adjust portfolios."

"Even if it's difficult to adjust the portfolio, adjustments are still necessary. It's unbearable to lose money every day holding small-cap stocks."

"The market trend might change again once the portfolio is adjusted."

"That's hard to say. If that's the case, then you'll just have to accept your bad luck."

"Speaking of the new energy industry chain, is anyone still paying attention? I bought shares of Shuguang Shares today, what should I do now? I feel like this stock will open significantly lower tomorrow."

"A significant gap down at the open would be good; what I'm worried about is this stock opening at the daily limit down tomorrow."

"It shouldn't open at the daily limit down, right?"

"I think it's possible. Although the number of 'severing losses' in the market has decreased a lot, they still appear from time to time. The main reason is that this stock has trapped too much capital today. This capital is basically from the most active ultra-short-term capital group in the market. Without a doubt, these funds will most likely have to quickly cut their losses tomorrow."

"If Shuguang Shares opens at the daily limit down tomorrow, I will definitely buy a lot at the limit down price."

"If it really opens at the daily limit down, I guess a lot of money will come to buy the dip, right?"

"It's hard to say, but if it opens at the daily limit down, there will definitely be a lot of panic selling and stop-loss orders."

"If the market really opens at the daily limit down, tomorrow's market trend will probably be even worse than today's. And if it really goes like this... the new energy sector will really collapse."

"The new energy sector was originally driven by positive news and speculation. It feels like there isn't enough internal accumulation of shares. Only the lithium battery sector can hold up, thanks to the large-scale investment and increased holdings of funds from 'Huayi Capital' led by Mr. Su. Other sectors have already corrected significantly from their highs."

"Indeed, at present, the only remaining option in the new energy sector is lithium batteries."

"Tianci Materials stock should be pretty good, right?"

"I feel good. Although there is a lot of divergence in this stock, there is no obvious loss effect. I feel that the market trend is not over yet."

"Tianqi Lithium and Ganfeng Lithium are also good stocks."

"Speaking of which, Apple's new product launch event is just around the corner. Is it still possible to work on the Apple concept stock line?"

"Judging from the intentions of major funds during today's trading, it seems that major funds are gradually reducing their holdings in the Apple concept stock sector. I think it's best to be cautious."

"Generally speaking, the closer it gets to the press conference, the more likely it is that good news will turn into bad news."

"That's right, so it doesn't hurt to be cautious."

"Then let's reduce some of our holdings first. But Lixun Precision stock is really strong. Most stocks in the market fell today, but this stock is still holding firm."

"It's clear that there's been a major player operating in the stock of Lixun Precision all along."

"I also feel that there are major funds operating in there all along."

As countless retail investors across the internet discuss the data from the Shanghai and Shenzhen stock exchanges' daily trading records, the price trends of many popular stocks, and debate the future direction of the market, the market sentiment is becoming increasingly volatile.

At the same time, in the internal investment group of the main institutional investors who are the driving force of the market.

There is considerable disagreement and debate among investors regarding the extreme divergence between the Shanghai Composite Index, the Shenzhen Component Index, and the ChiNext Index today, as well as the continued divergence between large and small-cap stocks.

At this moment, in the internal trading room of Jufeng Asset Management Co., Ltd.

After a thorough review of the market, Yu Xiaolu, the head of the trading team for the 'Jufeng Future Growth Fund,' observed the significant divergence in performance between large-cap and small-cap stocks and remarked, "Mr. Lu, given the current market sentiment and the divergent trends, if the market's trading volume doesn't improve effectively, I think... we might consider gradually reducing our positions and adopting a defensive trading strategy." (End of Chapter)