Rebirth of the Capital Legend

“Old Zhao, looking at the market’s strong opening, there’s bound to be a short-term recovery in sentiment, but…” Hearing Zhao Zhiyuan’s words, Zhang Wei smiled and replied, “You said that a batch of stocks that were wrongly sold off by the market yesterday afternoon have good speculative value. How can we distinguish which stocks were wrongly sold off?”

Zhao Zhiyuan responded, "It's very simple. Just look at which stocks should have risen or even hit their daily limit if the market had risen normally yesterday and sentiment hadn't collapsed. Furthermore, during yesterday afternoon's concentrated sell-off, which stocks showed strong resistance? These are basically the stocks that were wrongly sold off yesterday."

"Old Zhao's stock selection strategy is worth learning from." After hearing Zhao Zhiyuan's answer, Liang Jiucheng pondered for a moment and replied, "During yesterday afternoon's market sell-off, the stocks that showed strong resistance were quite obvious among the popular sectors such as infrastructure, consumer goods, new energy industry chain, and consumer electronics. They were easy to find."

“Yesterday afternoon, during the market plunge, some popular stocks showed strong resistance…” Zhang Wei pondered for a moment and said, “Oriental Yuhong and Beijiang Jiaojian should be included, as well as Taihe Shares. Their performance yesterday afternoon was also quite remarkable.”

Within the new energy industry chain...

The three stocks, Tinci Materials, Tianqi Lithium, and Ganfeng Lithium, all exhibit strong resilience.

Especially the stock Tinci Materials, which saw such a large trading volume yesterday despite the huge losses incurred by Shuguang Shares, didn't fall much, which is quite impressive.

As for the consumer electronics sector, the strongest performer should be Lixun Precision.

Other stocks such as Goertek, OFILM, Xinwei Communication, Lens Technology, etc., also performed well, but were clearly not as strong as Lixun Precision.

These should be all the stocks for now, right?
Look at the stock price movements during the opening auction today.

After a brief surge in trading volume yesterday, the stock of Beijiang Jiaojian opened at the daily limit again today. However, the buy orders were significantly lower than yesterday morning. I think this stock is likely to rise sharply today, but it is indeed not a good time to enter the market at this level.

The stock of Oriental Yuhong saw a slight increase in the initial opening auction.

I think this stock's trend is still very stable and it's worth continuing to invest in. Even if the entry point isn't ideal, it shouldn't be difficult to lose money as the trend continues.

Taihe Shares can be seen as a newly emerging low-priced leading stock in the infrastructure sector, especially the real estate development sector. If the market is to switch between high and low, or follow the trend of Beijiang Jiaojian gradually replacing Huawen Online, it could be a good opportunity.

Therefore, Taihe Shares is a stock that deserves close attention.

Anyway, I'm quite optimistic about this stock. When it hit the daily limit yesterday, I also took some positions and bought some shares.

Along the new energy industry chain...

The fact that Tianci Materials did not open lower today despite the significant volume and divergence yesterday indicates that yesterday's movement was a shakeout by funds, rather than a concentrated profit-taking or liquidation by the major funds gathered in the market.

Since it is a further transformation and shakeout of the chip structure.

Based on the trend and the shareholding structure, this stock is likely to continue to rise.

Moreover, this stock is not at a high relative position, and its valuation is relatively low compared to other small-cap growth stocks in the lithium battery sector. From a medium- to long-term perspective, it is still worthwhile to invest in. However, I already had a position in this stock, so I didn't make any moves yesterday.

It's clear that Tianqi Lithium and Ganfeng Lithium remain core leading stocks in the new energy industry chain.

Moreover, the shareholding structure of these two stocks is very stable.

Currently, there are no signs of any loosening of the internal shareholding structure of these two stocks.

I estimate that these two stocks will likely continue to attract the attention of a significant number of major market players. From a fundamental perspective, the market will inevitably focus on these two stocks when speculating on the core theme of the new energy industry chain and the lithium battery sector, as these two stocks represent the best domestic companies in lithium batteries, especially in lithium mineral resources.

I believe that the main trend of the new energy industry chain has not ended its decline at all.

This line resulted in significant losses yesterday.

The main reason for the decline is the sentiment following the collapse of Shuguang Shares. If market sentiment can recover quickly today, I feel that this sector will see a good rebound.

Originally, this line was relative to the main lines of large-scale infrastructure and large-scale consumption.

It is a newly emerging and popular theme that has only recently been established by major funds in the market and does not yet have many shares in hand.

This location cannot be where the trend ends.

In fact, you can tell by looking at the cost of capital invested by 'Huayi Capital' in the new energy industry chain.

After 'Fuxing Road' withdrew from the new energy industry chain, the cost of rebuilding its position recently was easy to estimate.

Basically, it's about the same as the average cost for most people.

Based on the cost basis of the newly acquired shares by 'Huayi Capital', the profit potential for this investment at the current price level is very limited.

Based on the past trading methods and records of this fund...

Generally speaking, this kind of capital will not easily hand over its shares unless it has achieved a very large profit margin.

Therefore, based on the logic of large institutions' holding costs, I believe that the new energy industry chain is not only not over in the future trend, but has only just begun.

Of course, as the trend continues, it's impossible for everything to go smoothly without any setbacks.

Therefore, the current pullback and fluctuations in the new energy industry chain, and the temporary loss-making effect, are, in my opinion, very normal fluctuations in the main market trend.

I remember before this large-scale infrastructure project...

Haven't there been brief fluctuations with such large pullbacks before?

Since the overall macro trend is upward and there are no problems, it can continue to rise steadily in the expected direction.

For the core leading stocks along this line, especially growth stocks and industry leaders with certain fundamentals and future performance support, that is,

Then it's even less likely that it will continue to fall.

These stocks are highly likely to see the realization of expectations and a surge in performance, leading to a "Davis Double Play" pattern in valuation and stock price.

Therefore, I am firmly optimistic about the three stocks: Tinci Materials, Ganfeng Lithium, and Tianqi Lithium.

Looking at the consumer electronics sector... As Apple's new product launch event draws closer, most of the early speculative funds that gathered in the consumer electronics sector, as well as some institutional funds that followed suit, are now thinking that the good news is now a bad thing and need to take profits or adjust their positions.

But actually, from a macro perspective...

In other words, this refers to the current smartphone market and the demand for smartphones in the near future.

There is clearly still room for growth in the consumer electronics sector.

Society as a whole is currently in a macro-situation of consumption upgrading.

Given the macro-condition of consumption upgrading, the continuation of the replacement cycle and the return of smartphone market demand to growth after a brief pause are easily foreseeable.

As long as the demand in the smartphone market continues to grow on a large scale and significantly.

Therefore, the leading stocks and industry stocks in the consumer electronics sector, especially those in the Apple supply chain, are the most direct beneficiaries.

In other words, it doesn't matter whether Apple holds this new product launch event or not.

Based on their underlying logic, these stocks are expected to rise due to the anticipated recovery in demand in the smartphone market and the relatively certain ability to generate strong performance. As for how much they should rise, that depends on the actual performance of each stock.

In general, the leading stocks in the previously popular sectors such as major infrastructure, major consumption, new energy industry chain, and Apple industry chain should perform well. Yesterday's performance of these stocks was simply a relatively simple fluctuation and adjustment, which will not destroy their original upward logic and upward trend.

Of course, some of these are within the major popular storylines.

However, these are unpopular stocks that have consistently failed to attract significant investment.

Stocks like Shuguang Shares, which suddenly surged to their daily limit with low trading volume due to a single positive development during this wave of speculative trading focused on the core theme, are inherently overvalued regardless of whether the stock price actually rises. Such stocks should be viewed with caution and should not be bought directly.

"Old Zhang, your analysis is indeed very detailed." Liang Jiucheng nodded and said, "My view is similar to yours. If we really want to make investments, we still need to choose from the hot themes of the market, such as major infrastructure, major consumption, new energy industry chain, and consumer electronics. After all, these hot themes have been hyped up by the market, meaning that the bullish sentiment has risen and the concentration of funds has also increased. If you buy stocks in these core themes, as long as there is liquidity and the sentiment is still there, even if the fundamental analysis is not that accurate, it is difficult to lose money."

“Yes, that’s how it is.” Zhao Zhiyuan nodded when he heard this, then paused and continued, “But at the beginning of the opening auction today, Shuguang Shares opened at the limit down. This kind of opening pattern of a sharp drop will definitely have a significant impact on the overall market sentiment, especially on the sentiment of the new energy industry chain.”

Therefore, I believe that many stocks in the new energy industry chain today...

The market trend today is unlikely to be very optimistic.

But as Lao Zhang said, if we extend the timeframe a bit, then the current stock prices of these companies actually offer relatively good value.

"I really didn't expect that Shuguang Shares would actually pull off a 'severing blade' pattern." Zhang Wei stared at the opening auction of Shuguang Shares and saw that the stock price had frozen at the 10% limit down the moment the market started fluctuating at 9:15, with initial sell orders reaching as many as 5 lots. He couldn't help but sigh, "It feels like it's been a long time since I've seen this kind of 'severing blade' pattern."

“Yes, we haven’t seen this kind of trend in the last two or three months.” Liang Jiucheng nodded and continued, “Of course, it’s actually reasonable for this stock to move like this today. It was expected and there’s nothing strange about it.”

Zhao Zhiyuan said, "I don't find it strange, but such a disastrous opening will most likely have a profound impact on short-term speculative sentiment in the market."

“I think the impact is limited,” Zhang Wei said. “First of all, this stock does not have a high market position and is not very popular. Secondly, the fact that it opened at the limit down during the initial call auction does not mean that the stock will still be at the limit down when the call auction ends.”

I feel that the current 5 lots of sell orders at the daily limit down price for this stock are unlikely to hold.

It is highly likely that as the market trading time progresses rapidly, many aggressive and active short-term funds will attempt to buy at this level.

In fact, if we expect the market today not to continue the trend from yesterday afternoon...

If we expect a partial recovery in market sentiment today.

Therefore, I think that buying some shares of Shuguang Shares at this time is actually a very good speculative opportunity.

Because of this stock, it has already pulled back more than 15 points from its high point yesterday.

Based on recent market trends...

Generally, after a sharp drop of more than 20%, leading stocks in popular market sentiment often experience a rapid rebound and recovery within one or two days.

Based on this pattern, this is a place worth gambling on.

Another issue is that most retail investors in the market have a habitual way of thinking, which is that they like to buy at the bottom.

If the stock opens at its daily limit down today, it means that it has reached its lowest point in terms of price movement. Even in the worst-case scenario, at least you won't lose money today.

This kind of mentality exists.

If this stock dares to hit the daily limit down today, there will definitely be no shortage of funds buying on the dip.

However, I'm certain that this stock will not open at its daily limit down by the end of today's pre-market auction.

"Regardless of the probability of winning a bet on this stock at its current limit down price," Zhao Zhiyuan said, "This stock, fundamentally and in terms of its chart pattern, is not my cup of tea, not one I admire, and not one I can hold onto. I think... Oriental Yuhong and Lixun Precision are the safest options."

"These two stocks should be the ones that perform better in a defensive posture, right?" Zhang Wei said. "They are indeed much safer, but in terms of upside potential, they can't compare with Shuguang Shares."

Amidst the heated discussion among several core speculative investors within the "Qilu Gang" group, a major group of speculative investors, the discussion intensified.

The market's trading hours continue to move forward rapidly.

9点16分、9点17分、9点18分……

With everyone's attention focused on us, the time quickly reached 9:20.

That is, when the market enters the real call auction phase where orders cannot be cancelled, most stocks that opened higher at the beginning of the call auction have fallen back significantly, and the market as a whole has begun to see most stocks opening flat.

As for the stock "Shuguang Shares," which was hotly debated by the three core speculative investors of the "Qilu Gang,"...

Although it is still locked at the daily limit down, after a large number of false orders were cancelled, the number of sell orders at the daily limit down has decreased to 4 lots, while the planned trading volume has increased from a few thousand lots at the beginning of the opening auction to as many as 7 lots. (End of this chapter)