Rebirth of the Capital Legend

"Tianci Materials' stock performance today isn't particularly proactive," Lao Zhang responded. "But that's due to the generally weak performance of the new energy industry chain. Furthermore, core sectors like automakers, auto parts, and auto interiors are all in a period of adjustment. The main force driving the market today isn't the new energy industry chain... So, I think it's quite normal that Tianci Materials' stock performance and initiative are weaker than Beijiang Communications Construction, a stock focused on major infrastructure projects."

Old Wu carefully observed the market, nodded, and continued, "Indeed, as far as the new energy industry chain is concerned, the lithium battery sector has shown some signs of independent strength. I feel that this branch... if it weren't for President Su's 'Huayi Capital' seat investing heavily in Tianqi Lithium and Ganfeng Lithium stocks,

This has caused the majority of follow-up investors and major capital groups in the market to continue increasing their holdings on this branch line.

I estimate that today's line is likely to be suppressed by the accumulated profit-taking, and it will enter a correction trend, just like the core industries of automobiles, auto parts, and auto decoration.

"Yes," Lao Zhang continued, "The reason why the lithium battery sector has performed so strongly, independently of the new energy industry chain, is indeed due to the huge influence of President Su's position at Huayi Capital. However, the underlying logic of this line seems to be sound."

"The underlying logic is naturally flawless," Old Wu said. "Ignoring the influence of the major investors, isn't the fundamental logic behind the core strategy's emergence based on the anticipated reversal of fundamentals across the entire industry chain? If the underlying logic were flawed, the new energy industry chain, a core market strategy, would never have garnered the attention of so many major investors and reached this point."

"However, although the trend of Tianci Materials' stock today isn't as active as Beijiang Communications Construction's, it's still very strong among the popular core leading stocks in the entire market." Brother Chen took over and continued, "Also, within the new energy industry chain, although there are certain divergences in the market trends of the major core industry sectors such as complete vehicles, auto parts, and auto decoration, the internal chip structure is clearly still gradually converging and there are no problems. Moreover, I think this divergence...is not a selling point, but a good buying point."

"Brother Chen, do you mean... that you continue to be optimistic about the new energy industry chain as the main line?" Xu Qiao asked.

Brother Chen chuckled and said, "Overall market sentiment is warming up. Under such circumstances, there's no reason not to be optimistic about the core market trend, which has the strongest underlying logic and a strong bullish momentum. Furthermore, judging by the market trends, within the major sectors of automobiles, auto parts, and auto decoration, while some profit-taking funds are selling off, some major funds that have taken the initiative are clearly increasing their holdings. If my predictions are correct, the overall chip structure of the main line of the new energy industry chain has not only not further dispersed, but is actually in a state of further concentration. The market's expectations and views on this trend have not actually changed significantly."

"Well, I agree with what Brother Chen said," Old Wu said. "Actually, regarding the new energy industry chain, to be precise, today is the first major market divergence since the release of the major positive news last Friday. The main pressure on this line today is still the selling pressure from potential profit-taking. Considering the underlying logic and future expectations, this line is essentially flawless. And I think that in terms of future expectations, the current valuations and positions of many stocks in this area are still very undervalued."

Old Zhang nodded and continued, "Indeed, judging from the overall situation of the major sectors in the new energy industry chain, as market trading hours progress, the main funds in this sector are indeed still showing a net inflow."

Xu Qiao paused and continued, "Although the new energy industry chain's performance today is weaker than that of the major infrastructure sector, it is still very strong compared to other core sectors of the entire market, and the internal chip structure has indeed not loosened."

"Yes," Old Wu nodded. "The three most popular sectors in the current market are still concentrated in large-scale infrastructure, the new energy industry chain, and the smartphone industry chain. In fact, it seems that the trend of the smartphone industry chain has exceeded expectations."

Lao Zhang said, "The smartphone industry chain is supported by the anticipation surrounding Apple's new product launch. Before this positive impact materializes, this trend will continue to generate anticipation and fuel speculation. In fact... the core market trends in this sector have been concentrated on the Apple industry chain. Other sectors, such as electronics and information technology and semiconductors, remain relatively weak."

"That's right," Xu Qiao said. "The funds speculating on this line are mainly concentrated in several core leading stocks in the Apple industry chain."

"I feel that the stock of Lixun Precision has really made a comeback," said Lao Zhang.

Xu Qiao continued, "That's right. This stock has clearly become the core leading stock in the entire smartphone industry chain."

"No way," Brother Chen said. "Looking at the entire Apple industry chain, the only core stock that's suitable for concentrated inflows and outflows by major institutional investors and has ample market liquidity is Lixun Precision. The other stocks are somewhat lacking."

"In fact, Goertek and OFILM are both good stocks," said Old Wu.

Brother Chen said, "Fundamentally, it's a little worse, right? The certainty of future performance explosion is not that high."

"The fundamentals of Changying Precision aren't great, but its stock price has been impressive," said Lao Zhang. "It's clearly become the leading concept stock in the entire Apple supply chain."

Brother Chen said: "Changying Precision is obviously a stock dominated by hot money. The trends of such hot money-dominated stocks are fundamentally different from those dominated by institutional capital. The logic behind the two is inherently different.

There is also the stock Changying Precision, which is a new stock that has entered the Apple industry chain this year.

The stock's previous performance was indeed very poor.

However, after officially entering the Apple industry chain, the expectations for subsequent performance growth are actually still very strong. I think this stock still has a strong enough underlying logic.

In fact, in the market, various speculators gather to speculate on the core concept leaders.

Regardless of whether the fundamentals are good or bad, there is an underlying logic behind it, and it is not just blind speculation.

Accompanied by the concentrated discussion and outlook on the market trend of several core main speculators in the "Magic City Ultra Short Gang" main speculator group.

The market trading time is now close to 11 o'clock in the morning.

After more than an hour of intense trading.

At this time, the market trends of the two markets and the performance of the major core lines have stabilized.

The main weight lines of the market's main board, such as liquor, white appliances, medicine, consumption, electricity, finance, petrochemicals... and other industry sectors and related concept sectors have all withdrawn from the market's leading position, and all showed a shrinking sideways trend. The market's small and medium-sized stocks, small and micro-cap stocks, and their related industry sectors and concept sectors have generally rebounded after the initial adjustments.

Among them, there are three core themes that have attracted much attention from investors both inside and outside the market.

Among the main areas of large-scale infrastructure, new energy industry chain, and smart phone industry chain, the most core industry sectors and concept sectors have all achieved increases and have become the market-leading industry sectors and concept sectors.

As for these popular main areas, investors pay more attention to core leading stocks and concept leading stocks.

The performance will be even stronger.

Stocks such as Beijiang Communications Construction, Tianci Materials, Changying Precision, Tianshan Cement, Chongqing Development, Micro-Body, Power Source, etc., all hit the daily limit.

Even in the early morning trading, the performance was very weak.

Everyone thought that the major sectors of the emerging industrial chain, such as film and television media, Internet software, and Internet applications, would continue to fall sharply.

At this moment, all of them have achieved a reversal and upward trend.

In addition, there are a number of oversold concept stocks in these major sectors, as well as popular concept stocks that are attracting a lot of attention from investors.

They have all attracted the attention of a large number of short-term active capital groups in the market, and their stock price performances have been stronger than the market index performance.

"Hehe... I was saying this morning's rapid market sell-off was a fake-out." At 11 a.m., when the Shenzhen and ChiNext indices both saw intraday gains of around 0.7%, Li Jinshi, a member of the Fushan group of major speculators, laughed heartily and said, "As expected, the market can't fall at this point. And with several key trend lines strongly supported by expectations, any pullback in stock prices will be met with clear buying. This situation... suggests the indices will eventually break higher."

Chen Guiyun nodded slightly at Li Jinshi's words and continued, "That's true. The potential buying power in the market is indeed stronger than everyone expected. This is especially true in the three core sectors of large-scale infrastructure, new energy industry chains, and smartphone industry chains. The corresponding leading stocks are indeed difficult to fall. Look... many core leading stocks have not only recovered their losses in early trading, but have also set new highs."

"Beijiang Communications Construction seems to have become a core market leader, breaking free from the path of a monster stock," Liao Guoxiang said at this time. "Furthermore, today's stock trend is fully in line with the overall market conditions. I expect this stock to open at a significant premium tomorrow."

"Beijiang Communications Construction's stock has already surpassed its five-day winning streak today," Li Jinshi said. "If it continues to rise tomorrow, expectations are naturally that it will perform better than today. Further acceleration is entirely possible. Furthermore, the performance of many mainland real estate stocks in the Hong Kong stock market is truly strong. For Kewan Real Estate, its Hong Kong share price, compared to its mainland stock price, is almost wiping out its liquidity premium."

"Yes!" Chen Guiyun also sighed, "It feels like the main group of funds investing in domestic real estate stocks in the Hong Kong stock market is even more crazy than the hot money groups in the A-share market. It's really weird. Is this the trading style of foreign investors? It feels completely different from the previous foreign investment style."

Liao Guoxiang said: "I guess it's domestic capital moving south that's speculating on a number of domestic real estate stocks."

"I feel the same way," Chen Guiyun said. "This kind of concentrated hype seems very much the work of major domestic institutional investors."

Liao Guoxiang nodded and said, "But even if it's domestic institutions heading south, there's no harm in that. At least it's stimulating bullish sentiment in both markets. As long as sentiment remains positive and the market continues to generate profit, it will more or less attract some off-market capital."

"That's right," Li Jinshi said. "Emotions are very important to market trends."

"Today, the Apple supply chain seems to be somewhat independent of the smartphone supply chain, and has strengthened independently." Chen Guiyun paused and continued, "It seems that the active short-term capital groups in the market have begun to concentrate more on the Apple supply chain branch."

Liao Guoxiang said: "It's not just the smartphone industry chain that's seeing a greater concentration of core leading stocks. The new energy industry chain is also doing the same. Aside from the strong performance of the lithium battery sector, other related industry sectors and concept sectors are lagging behind. Even the main line of major infrastructure projects, where funds are concentrated, is increasingly concentrated on core leading stocks in real estate, building decoration, and building materials. Previously, they could still keep up with these three sectors, but the steel, coal, and nonferrous metals sectors, which used to be able to keep up with the trends of these sectors, are now completely unable to keep up. It feels like they've been abandoned by funds."

"The current logic of the steel and coal sectors is inconsistent with that of the real estate, building decoration, and building materials sectors, right?" Li Jinshi said. "It seems that the steel and coal sectors have completely followed the logic of the shared testing reform, and this logic requires clear performance improvement to drive it forward. After all, without substantial performance support, it is really difficult to hype up the stock prices of traditional industries."

Chen Guiyun nodded and said, "There's also a strong correlation with futures price trends, such as rebar futures prices, thermal coal futures prices, and non-ferrous metals like copper, cobalt, iron, lithium, gold, and silver. To be honest... I don't really like to trade stocks that are strongly correlated with futures price trends, or the market trends of the corresponding sectors."

"I don't like it either," Liao Guoxiang said. "The more external factors that influence stock prices, the harder it is to predict and grasp the market trends. So even if I spot opportunities in traditional energy and other industries, it's often difficult to invest heavily."