Rebirth of the Capital Legend

"I don't think there's a big problem," Zhao Qiang said. "With 20 lots traded at the opening, the most panicked selling pressure has been resolved, and the market sentiment has reversed. After the market opens, the market sentiment for Shuguang Shares will clearly lean towards a bullish situation. Since the bulls are in control, and the selling pressure isn't that strong, there's no reason for the stock price to fall. Besides, the stock's correction yesterday was deep enough, which gives it a good rebound potential today."

Even if Shuguang Shares rebounds and hits the daily limit today, it will not reach yesterday's opening high.

In other words, it will not face particularly strong selling pressure from profit-taking.

Therefore, as long as the market sentiment stabilizes at the open, the intraday performance of this stock should be relatively optimistic.

Whether a second wave of market activity can emerge here, and whether there is still room for speculation based on the restructuring expectations, depends on tomorrow's market trend.

If it can continue to reach new highs and break yesterday's intraday high.

Furthermore, if the active funds in the market continue to provide support, and the market discussion and attention surrounding this stock remain high, then...

Then, a second wave of market activity can begin.

If not, it might just be a weak rebound due to a temporary improvement in sentiment, followed by a continued sharp decline.

In summary…

At this price level, both the risks and opportunities exist for this stock to continue its upward trend.

This is also the reason for such a large emotional divergence.

“Relatively speaking, I’m actually more optimistic about Tinci Materials stock.” Old Qian chimed in after hearing Zhao Qiang’s analysis. “First of all, during Tinci Materials’ continuous rise, the turnover of shares has been more thorough, and the internal shareholding structure is more stable. The funds that had been accumulating shares in the early stages have sold off a significant amount during the continuous turnover, and the amount of funds with substantial profit potential is not large. During the thorough turnover, everyone’s holding costs have been constantly rising, which means that the potential downward momentum will not be as strong as that of Shuguang Shares.”

Secondly, compare the industry sector and concept sector in which Tinci Materials operates with that of Shuguang Shares.

It has more room for imagination and future prospects.

Generally speaking, in an industry, upstream companies will definitely benefit first and be able to show their performance sooner than midstream and downstream companies.

Another factor is the level of activity in the stock's trading.

Tinci Materials is a more volatile stock with a smaller free float and a smaller market capitalization.

In the current situation of very limited market liquidity, this makes it even more conducive to the accumulation of funds for speculation.

“Tianci Materials is indeed a good stock.” Sun Chengyu nodded, agreeing with Lao Qian’s analysis. “If we can determine that the main theme of the new energy industry chain today will follow the logic of sentiment recovery, then investing in Tianci Materials, which has been wrongly sold off, is indeed better in terms of the potential gains and losses than directly investing in Shuguang Shares.”

Actually, I think the new energy industry chain is more likely to have a better and more sustainable trend.

While the performance of Shuguang Shares may be influenced by factors related to the overall market trend, the main drivers can be determined by observing the performance of Tianqi Lithium, Ganfeng Lithium, and other heavyweight stocks in the automotive sector.

If this batch of stocks continues its upward trend...

In terms of trading volume, there were no abnormalities.

Meanwhile, the intervention of major buying funds is quite active, indicating that major institutions are continuously building positions. Technically, there has been no breakdown.

Therefore, this line has room to continue.

Given the existence of room for further speculation, there would be no major mistakes in either investing in Tinci Materials or Shuguang Shares for the same purpose.

Of course, if we're talking about intraday trading today...

Shuguang Shares is definitely a better choice, given that this stock is attracting a lot of market attention today.

The majority of retail investors in the market are motivated by market sentiment, following trends and attention.

“Brother Sun is right.” Old Qian nodded and said with a smile, “The sustainability of the new energy industry chain does need to be seen, but I am relatively optimistic. After all, with so many favorable policies stimulating it, it is impossible for the entire industry chain to remain completely stagnant.”

"Besides Shuguang Shares, what do you all think of Beijiang Jiaojian stock?" Zhao Qiang paused, then asked, "I feel there will be a lot of disagreement about Beijiang Jiaojian stock today."

Old Qian chimed in, "I don't think there's anything wrong with the opening of Beijiang Jiaojian stock today. Those who say it opened with a limit-up are really crazy. If it continues to open with a limit-up at this level, it will inevitably be dumped by profit-takers after the opening. And if it really goes like that, this stock is truly doomed."

The current market movement has once again shifted the market from a high degree of consensus to a high degree of divergence.

This intensifies the exchange of chips in the market at this position.

Instead, it gave them a glimmer of hope to continue the upward momentum.

After all, given the reasons for the increased trading volume during yesterday's accelerated price movement, it's impossible for this stock to continue its accelerated price movement with decreasing volume today.

Therefore, I think the opening pattern of this stock in today's pre-market auction should be considered as expected, right?

Those who say the results were below expectations, I think, truly don't understand market sentiment and have little grasp of short-term trading.

“Old Qian is right.” Sun Chengyu nodded with a smile and continued, “The stock of Beijiang Jiaojian needs to break through the divergence again here. Actually, I think the opening auction of Beijiang Jiaojian today was somewhat unexpected. It has strong characteristics of a core market leader. There must be a major force with a large scale guiding this stock. If it were just a concentrated expression of sentiment, I don’t think this stock would have formed today’s pattern and opening situation.”

This high opening price did not provide a good opportunity for investors who had made substantial profits to sell.

At the same time, it did not provide a good entry point for sidelined funds to buy at the bottom.

This has led to hesitation among those who have profited in the market when it comes to selling, and also hesitation among those outside the market who are willing to take over.

When both buyers and sellers are hesitant, the constant fluctuations in overall market sentiment will intensify the exchange of shares, making it easier to stabilize the market trend.

Any one-sided price movement in the current position of Beijiang Jiaojian stock.

Those were all devastating.

An excessively high opening price will cause profit-taking to crash the market, while an excessively low opening price will cause a collapse in market sentiment, affecting the willingness of sidelined funds to enter the market and also causing panicked funds within the market to crash the market.

Such an opening would naturally be the best outcome.

However, the stock of Beijiang Jiaojian managed to stabilize the market through this high opening pattern.

However, I think it will be quite difficult to continue moving upwards and rapidly expanding the space upwards.

Analyzing the current internal shareholding structure of this stock, the most likely trend is that it will establish a new large-volume trading pattern here, continue to consume the potential selling pressure in the market, and wait for everyone's holding cost to rise again, approaching the current stock price, before it can continue to expand rapidly upward.

Otherwise, rushing to expand upwards now would be tantamount to this bullish stock reaching its final peak.

If the funds involved are focused on long-term benefits and have a high-level vision, they shouldn't be so eager for quick success and instant benefits.

And what if next...?

If the stock of Beijiang Jiaojian follows the trend I expected, it will likely establish a new consolidation range at this level.

Therefore, it is highly likely that the main theme of large-scale infrastructure construction, which is the core of market sentiment and the focus of investors, will be the main theme.

The market trend within its main theme is about to undergo a shift from high to low.

In other words, some stocks that are still at low levels, have certain positive support, and have a speculative logic should usher in a relatively large speculative opportunity.

Another key theme is that low-priced stocks that are catching up after their first or second limit-up day may present good opportunities.

“Brother Sun, aren’t you talking about ‘Taihe Shares’?” Zhao Qiang chimed in. “If the entire infrastructure theme is going to undergo a high-low rotation, then the primary target of funds will be ‘Taihe Shares’, right? And this stock opened at a pretty good position today. I estimate that once the market officially opens, this stock will hit the daily limit immediately.”

Old Qian nodded and continued, "I think Taihe Shares is a good stock. Although it's only just started to hit the second limit up, the market enthusiasm is really high. Moreover, the chairman of this company has been very high-profile recently, constantly releasing positive news to the market. It seems that the boss of this company also wants to drive up the stock price, right?"

“Of course,” Zhao Qiang continued. “With the real estate market in a full-blown bull market, Taihe Shares, a real estate development company, was originally just a third-rate domestic real estate development company. The boss is being so high-profile and releasing so many positive news. He must want to push up the stock price and then use the soaring market value to raise new funds. Only by increasing financing and expanding leverage can the company, with its existing asset size, get a bigger slice of this full-blown real estate bull market. I think this is not hard to understand, and it also seems to be a good speculative opportunity.”

“Yes, Lao Zhao’s analysis is correct.” Sun Chengyu took over and continued, “I am optimistic about Taihe Shares because the company’s foundation was not good before, but now, due to the comprehensive real estate bull market, the boss is too ambitious and the leverage is relatively high, which gives it a very high elasticity and expectation gap.”

Regarding the various stocks in the market...

In fact, what affects its stock price speculation is not a fundamental issue.

It's not a matter of expectation gap.

Good stocks are like the top students in a class. Since they already have excellent grades, everyone's expectations are naturally high. So, when everyone's expectations are generally high, it's hard for anything to exceed those expectations. On the other hand, the poor students, who usually don't do well, suddenly perform very well for some reason, so there's a strong expectation gap.

This is the driving force behind the continued upward speculation of stock prices.

This is also a reason why many retail investors in the market like to complain that stocks with good performance don't rise, while stocks with poor performance suddenly rise.

Taihe Co., Ltd. is a stock that is in the process of rapidly transforming from a poor student to a top student.

During this process, due to the significant difference between expectations and reality, its stock price will naturally show some performance.

“Since Brother Sun is so optimistic about it, I will definitely take a position in Taihe Shares after the market opens,” Zhao Qiang said. “Actually, I feel that Hong Kong stocks are stronger in the infrastructure sector. The current trend of a number of mainland property stocks in the Hong Kong market is still extremely strong, and there is no sign of the trend weakening at all.”

Old Qian said, "The funds in the Hong Kong stock market are obviously smarter, and their understanding of expectation gaps is also deeper than that of the mainland funds. In fact, it is still easy to do business in the A-share market by taking the performance of relevant stocks in the Hong Kong stock market as a leading condition. Judging from the performance of a number of mainland real estate stocks in the Hong Kong stock market, I dare to say that the current position of the large infrastructure sector is definitely not the end. There is a high probability that there will be a great wave of magnificent upward trend in the future."

"Haha, I think so too," Zhao Qiang said. "With such strong expectations and such a fierce real estate bull market, how could the gains possibly end after this little bit?"

"However, the consumer sector and the smartphone supply chain seem a bit weak today." Old Qian paused, then continued, "Especially the smartphone supply chain. I feel like it has completely entered the stage of 'realizing the benefits,' right? Sure enough... the domestic market still likes to engage in some kind of pre-emptive speculation, pre-emptive overspending, and pre-realization. This round is probably going to be another round of harvesting those retail investors who came in following the positive news from Apple's new product launch."

“Yes, I also feel that the Apple supply chain has entered a clear period of profit-taking.” Zhao Qiang nodded and said, “However, the stock trend of Lixun Precision seems a bit abnormal. Why has this stock been moving independently of the entire sector and consistently outperforming the market index? Is there some different positive support? Or is there some potential positive news stimulating it? This stock just seems to be behaving very strangely.”

Sun Chengyu thought for a moment and said, "This stock has been fluctuating for many days. Its performance is indeed much stronger than other Apple supply chain stocks. I think this stock has better fundamentals and higher certainty for the future. Also, the main force behind it is very strong. It should be a major institution that has been continuously accumulating positions and buying. That's why this stock's performance is completely different from other Apple supply chain concept stocks, right?"

“Lixun Precision’s market capitalization is quite large,” Lao Qian said. “Which major institution could continuously accumulate shares and cause this kind of movement? Could it be Huayi Capital?”

Sun Chengyu said, "That's hard to say. 'Huayi Capital' hasn't been around much lately, so there's a chance it's that institution. However, without the confirmation of the stock exchange's trading data, it's hard to make a definitive judgment. But with major funds building positions, it's definitely true."

“I feel like it is,” Zhao Qiang said. “I compared the stock trends of Lixun Precision and Oriental Yuhong before, and found that they have certain similarities. Moreover, the current institution ‘Huayi Capital’ seems to like to build positions in mid-to-large-cap growth stocks that dominate the market because they have good certainty and growth potential, and their large market capitalization is suitable for large institutional funds to move in and out.”

"Yes, that's true." Old Qian nodded. "Looking at the stocks that 'Huayi Capital' has been building positions in recently, such as Oriental Yuhong, Tianqi Lithium, Ganfeng Lithium, and Conch Cement... Their operating style and target stock selection are indeed increasingly biased towards mid-to-large-cap growth stocks. It seems that this fund has completely abandoned some small-cap concept stocks, and there has been no trace of any position building operations recently."

“With his current financial resources, it’s pointless for him to continue trading small- and mid-cap stocks,” Sun Chengyu said. “After all, small- and mid-cap stocks can only support a limited amount of capital. Even if a single stock can generate tens or hundreds of millions in profit, it’s just a drop in the ocean compared to the amount of money he currently controls. The effort he puts in is disproportionate to the amount of profit he makes.”

“Regardless of whether it is…” Zhao Qiang said, “Since the stock of Lixun Precision has shown obvious and continuous abnormal movements, I think we should still take a partial position and get a head start. What if this stock really does follow the example of Oriental Yuhong and experience a doubling trend of price increase without any regard for others?”

Old Qian smiled and nodded, saying, "I agree. Regardless of whether it's true or not, regardless of whether there are any gains or losses, let's take a few shots first. Anyway, judging from the current trend of Lixun Precision's stock, even if the main force driving this stock isn't 'Huayi Capital,' they shouldn't lose much money. At most, it's just a matter of how much they earn." (End of Chapter)