Rebirth of the Capital Legend

“Old Chen’s words are very insightful,” Li Jinshi said with a smile. “Indeed, compared to the potential profits, controlling the drawdown of funds is more important. In the current market trend, the safest trading strategy is to focus on the main themes.”

Moreover, the overall market sentiment is currently relatively optimistic, and there are corresponding expectations.

However, the overall trading volume is still not optimistic.

The Shanghai Composite Index's continued fluctuation around the 3100-point level is certainly not a long-term solution. As the saying goes, prolonged sideways movement inevitably leads to a decline. If it fails to break through this level for an extended period, there's a good chance it will experience a further rapid drop back to 3000 points, allowing for another round of internal restructuring and consolidation of the index's shareholding structure.

“Yes, at this position, we do need to be wary of a potential drop in the index,” Chen Guiyun nodded. “Even if we’re focusing on the core themes, we should still control our positions. I personally wouldn’t dare to go all in or make a heavy investment at this point.”

This was accompanied by analysis from several key figures in the 'Fushan Group' of major speculative investors.

At this moment, on all major online stock investment discussion platforms.

Numerous retail investors are engaged in heated discussions regarding today's market closing results and the performance of popular stocks in key sectors.

"Shuguang Shares is indeed beyond saving. Despite the strong performance and high speculation in the new energy industry chain today, it still closed at its intraday low, forming a long upper shadow. Based on this candlestick pattern, this stock will most likely continue to fall sharply tomorrow."

"Shuguang Shares is definitely going to continue its sharp decline tomorrow. All the investors who bought this stock today, including the speculative funds that bought at the bottom during the opening auction and the large amount of retail investors who followed up, are now trapped in the market. It's unbelievable... I never expected this stock to perform so weakly today."

"If it weren't for the main theme of the new energy industry chain, which performed quite well today, I think Shuguang Shares would most likely have hit the daily limit down. Sigh... I really shouldn't have impulsively bought this stock this morning. I was optimistic about both Tianci Materials and Shuguang Shares, but I made the wrong choice. If only I had chosen Tianci Materials, the difference in the performance of these two stocks is just too big now."

"I was also choosing between Tinci Materials and Shuguang Shares, and I finally chose Shuguang Shares. Damn it... one hit the daily limit up, and the other fell by 3%. Considering the expected performance of the two stocks tomorrow, the difference is at least 20 points in profit margin."

"I'm afraid the profit margin difference is more than 20 points. Tianci Materials will definitely open significantly higher tomorrow, while Shuguang Shares, despite such a good emotional boost today, failed to rise, which means that the speculation on this stock is completely over. With so many intraday trapped positions, plus the large-scale lurking positions that entered earlier, I think it would be good if this stock doesn't open at the daily limit down tomorrow."

"It shouldn't hit the daily limit down, right? I estimate it will drop by at most four or five points."

"It's hard to say. The market's expectations for the future performance of Shuguang Shares are actually quite pessimistic. After all, after stocks like Tianci Materials, Penghui Energy, and Xiandao Intelligent have performed well, Shuguang Shares, a stock with a problematic shareholding structure, has seen its popularity and discussion level continuously decline, and it has been completely abandoned by the market."

"Sigh, I don't know where this stock got such a large amount of selling pressure from. Actually, for a period of time today, the stock of Shuguang Co., Ltd. had a good support level and even boosted the new energy industry chain. I just don't know why the stock suddenly plummeted in the afternoon."

"I think the reason is that the stock's circulating shares are too large, and the market's funds are insufficient to support the stock's circulating shares."

"It doesn't seem to have much to do with this, does it?"

"The market plunge in the afternoon wasn't just limited to Shuguang Shares; the entire technology sector saw a sharp drop in the final stages of the afternoon trading session."

"But Shuguang Shares isn't exactly a concept stock in the market's main technology theme, is it?"

"Although it doesn't qualify as a sector in terms of sector characteristics, the market's expectations for this stock still place it within the technology sector."

"I don't think that's the reason. The root cause is still the issue of expectations and the structure of the chips."

"Isn't the outlook for the new energy industry chain pretty good?"

"The overall outlook for the new energy industry chain is probably still quite average, right? The hottest area for speculative investment is the lithium battery sector."

"That's right. In the new energy industry chain, the strongest sector is the lithium battery sector."

"Apart from the lithium battery sector, other new energy industry chain-related sectors, as well as related concept stocks, have generally performed poorly."

"The automotive, auto parts, and auto accessories sectors are indeed not performing well."

"Most of them underperformed the market index."

"It seems that if we want to work on the new energy industry chain in the future, we will have to focus on the lithium battery sector."

"Absolutely. If you don't know which stock to buy, just buy Tianqi Lithium and Ganfeng Lithium. I think these two stocks still have great potential."

"Between Tianqi Lithium and Ganfeng Lithium, which stock do you think is stronger?"

"I feel Ganfeng Lithium is stronger, right?"

"I feel the same way. It seems that the market has better expectations for Ganfeng Lithium than for Tianqi Lithium. Moreover, Ganfeng Lithium has a smaller circulating share and market capitalization, making it easier for institutional funds to control the stock. The potential for future growth and speculation is also greater."

"Then let's buy Ganfeng Lithium stock."

"What do you all think of Dofluoride stock? With Tinci Materials hitting the daily limit today, this stock also surged by 5%. And I remember that this stock was once held by Mr. Su's 'Huayi Capital'. I feel that if funds are to continue to speculate on Tinci Materials stock, Dofluoride stock will be unavoidable, right?"

"If you don't like chasing high prices, I think buying Dofluoride stock is a perfectly fine option."

"These are all core leading stocks in the lithium battery sector. I think as long as the lithium battery sector index rises, it shouldn't be a big problem to buy any of these stocks; you should be able to make money."

"Not necessarily. The difference between leading stocks and followers is actually quite significant."

"That's right. Take Shuguang Shares and Tianci Materials, for example. Their stock trends are based on similar logic, but their intraday price movements differ by nearly 14 points."

"What about Penghui Energy? It seems like this stock is also showing signs of becoming a leader in the new energy industry chain."

"Penghui Energy is a good stock. Today, there are definitely strong institutional investors and speculative funds heavily invested in it. I think this stock will likely rise sharply in the future."

"Unfortunately, I was a little too slow to spot it in the market and didn't have time to act."

"Let's take a look at the post-market trading data. If the major speculative funds involved are very strong, I think this stock will be a good entry point when it opens tomorrow morning."

"I just hope that tomorrow, the stock of Shuguang Co., Ltd. won't drag down the overall trend of the new energy industry chain and affect the trend of many popular stocks in the lithium battery sector."

"It shouldn't be. The popularity of Shuguang Shares has decreased, and its market influence is no longer that great." "Currently, the sentiment indicator for the core theme of the new energy industry chain is Tianci Materials. Shuguang Shares is not that important anymore, so it won't have too much impact on the investment sentiment of this core theme. I think everyone doesn't need to worry too much."

"You have a point. It all depends on how Tianci Materials' stock performs tomorrow."

"What else can happen? I feel that Tianci Materials stock will most likely hit the daily limit up tomorrow, right?"

"Not necessarily. Doesn't anyone feel that Tianci Materials' stock isn't following a short-term consecutive limit-up pattern, but rather a trend-up upward path like Oriental Yuhong's stock before?"

"Compared to the stock performance of Oriental Yuhong, there seems to be a clear difference in both the underlying logic and the candlestick pattern, right?"

"Of course they are not exactly the same, I mean there are obvious similarities."

"Could it be that Mr. Su's 'Huayi Capital' has also invested in Tianci Materials stock?"

"It shouldn't be that bad. Tinci Materials' stock doesn't even have a market capitalization of 10 billion, and the number of shares in circulation is even smaller. With this size, I feel that 'Huayi Capital', which is managed by President Su, shouldn't be able to get in. And even if they did, how to exit and withdraw later would be a problem. I believe that 'Huayi Capital', which is managed by President Su, definitely has a lot of shares in Tianqi Lithium and Ganfeng Lithium, and they should be locked up. But Tinci Materials' stock... in terms of its trend, it really doesn't seem to be the trend that President Su guided."

"Regardless of whether Mr. Su is guiding the market for this stock, we should remain firmly bullish on it."

"I feel that the stock price movement of Lixun Precision is more like that of 'Huayi Capital' under the leadership of President Su. This trend is more similar to the previous trend of Oriental Yuhong."

"It's possible that it's Lixun Precision stock. There's been almost no trading data recently, so we can only speculate."

"Probably not. I haven't seen any trace of Mr. Su's involvement in other stocks in the Apple supply chain. Moreover, looking at the specific holdings disclosed by the 'Huayi Capital' fund, it doesn't seem to have been involved in the main line of the smartphone supply chain."

"Just because we didn't intervene before doesn't mean we won't intervene now."

"I don't think so. President Su has always focused on the core themes of the market. Right now, the Apple supply chain isn't showing enough strength or meeting expectations, is it?"

“Strength is demonstrated through experience. At the beginning of the year, was there any particularly strong consensus expectation for the liquor sector? There wasn’t, was there? Yet, Mr. Su’s ‘Huayi Capital’ directly bought over 10 billion yuan worth of shares in this sector and has been holding them ever since. Furthermore, was there any strong consensus expectation for the ‘major infrastructure’ sector before?”

"The 'major infrastructure' sector has actually been expected to perform quite well all along, hasn't it?"

"The expectations are good, but the speculation has not been so concentrated or heated before."

"What about the steel, coal, and non-ferrous metals sectors? These are some of the hottest sectors in today's trading. Why does it seem like people aren't very optimistic about them?"

"Is there anything worth discussing in these sections?"

"Indeed, these are all sunset sectors with no room for imagination. I think the trend of these sectors today is probably just an oversold rebound after a long period of decline. There won't be any sustained market. Just be cautious about chasing them."

"Although these sectors don't offer much room for growth, the corresponding stocks are really undervalued."

"Stock trading isn't about so-called imagination, but about expectation gaps. Although traditional sectors don't have the unlimited imagination of the technology sector, they are still easy to generate expectation gaps when valuations are low and expectations are pessimistic. And with expectation gaps, there is a logic for stock price speculation."

"I don't think so. We still need to see how the market reacts and how much consensus there is among the investors."

"I am not optimistic about the continued strength of the steel, coal, and non-ferrous metals sectors. After all, the amount of active funds in the market is already insufficient, and the liquidity in the market is very limited. With such limited liquidity, there are not enough funds allocated to the main infrastructure and consumption themes. Where will so many buyers come from to concentrate their buying on second- and third-tier sectors like steel, coal, and non-ferrous metals? Moreover, the stocks in these sectors have a heavy amount of trapped capital. Even if there is expectation and some buying support, it will be quite difficult to loosen the trapped capital and rebuild the chips, unless the overall market liquidity improves, which is obviously impossible."

"Why can't liquidity improve? Didn't the central bank say it would continue to cut reserve requirements and interest rates in the future?"

"Do you think that after the central bank cuts the reserve requirement ratio and interest rates, the large-scale liquidity in the macro environment will flow into the stock market? It's impossible. Just look at how many companies that were not originally in the real estate sector have started to get involved in real estate business through investment. Even if the central bank releases some liquidity into the macro market, this liquidity will most likely all flow into the extremely hot real estate development market or the speculation in the housing market."

"Yes, I agree with that view. In terms of profit-making effect, the current stock market is indeed incomparable to the real estate market."

"So, there's really no hope for any new funds entering the market?"

"There was no hope to begin with. It is foreseeable that the market will likely fluctuate at the current level of trading volume for a long time without any obvious upward trend."

"Doesn't this seem a bit too pessimistic? If the central bank releases two trillion yuan into the macroeconomy, there should still be hundreds of billions of yuan of incremental funds flowing into the stock market. Moreover, it seems that the market is not lacking in positive factors. Furthermore, the current valuation of the entire market is generally very cheap. At this valuation level, adding some positive factors should have a certain stimulating effect on those investors who are currently watching from the sidelines, and induce them to re-enter the market, right?"

"That makes sense when I think about it, but in reality... who can say for sure?"

"Based on the current liquidity, it should be sufficient to support a market trend with one or two core themes rotating around each other, right?"

"The market trend of rotation should still be acceptable."

"I think that's enough if there's a localized profit-making effect."

"That's right. As long as there are market fluctuations and localized profit-making opportunities, we can focus on the core themes."

"The concern is that under the influence of pessimistic sentiment in the medium and long term, major funds will increasingly concentrate on blue-chip stocks. If institutional funds increasingly flock to these blue-chip stocks, the liquidity available to small and medium-sized concept stocks in the market will decrease, and short-term trading will become increasingly difficult."

"It shouldn't be that bad, right?"

"I feel like there's a trend like this, and we have to be wary of it."

Amidst the continuous discussions among countless retail investors, market time flew by, and before we knew it, it was around 5 p.m.

At this time, it was also time for the data on the stock exchange's daily trading records to be updated.

For the numerous retail investors in both Shanghai and Shenzhen stock exchanges who chase short-term gains, as well as the various speculative funds active in the market, the data from the stock exchange's daily trading records is particularly important.

So, the moment the data on the stock exchange's daily trading records were updated...

Both inside and outside the market, countless investors' eyes quickly fell on the published list of top-performing stocks. (End of Chapter)