Rebirth of the Capital Legend

"Market intraday trading volume is dropping so quickly. It seems the surge in major infrastructure investment, the core theme, hasn't attracted enough incremental off-market long positions in the early afternoon session. Meanwhile, there seem to be some issues recovering overall bullish sentiment within the market." At 1:55 p.m., Zhao Qiang, a member of the Yuhang Group's major speculators, observed the changes in the two markets and lamented, "I originally thought that with the strengthening of the major infrastructure theme after the afternoon opening, the index would break through again. I didn't expect... the market volume is still insufficient."

Hearing Zhao Qiang's sentiments, Lao Qian in the group said, "The main reason is that, apart from the main trend of large-scale infrastructure, the other main market trends are too poor, and there is no consistent resonance relationship. As a result... the large-scale infrastructure line is naturally a bit difficult to support on its own. In addition, this line has continued to rise without a decent adjustment. At this relatively high level, many funds have a considerable fear of heights, regardless of large-scale increase in holdings to follow the trend."

"Yes, indeed," Sun Chengyu responded in the group. "Today, the major infrastructure sector, influenced by the continued surge in real estate stocks in the Hong Kong stock market, has indeed performed well, but it has not formed a consistent resonance with other main market trends, resulting in the lack of a fully formed collective bullish sentiment across the market.

Especially the two core areas of new energy industry chain and smart phone industry chain.

Apart from the lithium battery sector and the Apple concept sector, the market trends of other related sectors are actually very divergent.

There were also several major sectors, including film and television media, Internet software, and Internet applications, which once rebounded strongly during the trading session.

There is no consensus on going long.

Even within these sectors, many popular stocks have had a lot of active buying funds siphoned off by the major infrastructure projects.

As for the performance of weighty sectors such as liquor, white goods, medicine, consumption, electricity, and finance on the main board.

Not to mention, it has been maintaining a trend of shrinking volume and fluctuation.

Analyzing from the perspective of the trading volume of the two markets, in fact, the entire market has now entered into a pattern of stock game after the positive news from last Friday was almost realized.

Moreover, judging from the trends of the main lines of the new energy industry chain and the main lines of the smartphone industry chain.

During the process of overall sentiment receding, short-term profit-taking funds have been selling and suppressing the market.

Under this situation, it is still very difficult for the Shanghai Composite Index to truly break through 3100 points, break out of the previous volatile pattern, and form an upward breakthrough trend again."

"Ah, indeed..." Zhao Qiang sighed softly and said, "It really is still a problem of volume. No matter how good the news is, it's always difficult to attract too much off-market funds into the market and keep them there. The offline real estate market still has a huge siphoning effect on the overall macro-level capital liquidity. It seems that if the hot pace of the offline real estate market doesn't slow down, it will be difficult for the market to change fundamentally."

"From a long-term perspective, this is the case," Sun Chengyu said. "The time for a bull-bear market transition has definitely not arrived yet, so we don't need to dwell on it too much."

Lao Qian pondered for a moment, then took over and continued, "In fact, in addition to the factors of volume, there is another main reason why the index has been suppressed in this area and the selling pressure in this area is so great. That is, this index area is the chip vacuum area when the stock market crash broke out at the beginning of the year. The index plummeted rapidly and the stock price plummeted. The huge amount of chips in this area had not been fully traded before, and the locked-in position is extremely heavy.

In order to loosen the chips in this range, in addition to the volume, there must be a continuous burst of growth.

I think it also requires the coordination of time and space.

In other words, it is necessary for the index to experience long-term fluctuations and sideways trading in this area where chips are concentrated. Only after a long period of fluctuations and sideways trading can the trapped chips concentrated in this area be truly digested.

In fact, the short-term profit-taking selling pressure has a minor impact on the market trend.

However, no matter how the index fluctuates within this range, the local market profitability will certainly persist, supported by the core theme of large-scale infrastructure construction.

"What Old Qian said is indeed a major reason." Sun Chengyu nodded and said, "This location area is indeed an area where chips have not been exchanged during the previous stock market crash, and the chip gap is relatively serious."

Zhao Qiang thought for a moment and said, "Since the index is likely to fluctuate in this area for a long time due to the volume and overall chip structure, then when choosing a trading strategy, I'm afraid we should lean towards a more defensive approach. We shouldn't be too aggressive."

Sun Chengyu continued to nod and said, "That's for sure. I think at this point, whether it's speculation or investment, half-position operation is more appropriate. Sell when it rises too much, buy when it falls too much. It's always right. Although the hot offline real estate market has indeed siphoned off a lot of macro liquidity, making it difficult for many off-market capital groups to flow into the stock market, but in the local market trend structure, especially in the fundamentals of the large infrastructure line, as well as future expectations, are still improving, and the main institutional capital groups gathered in this line are still increasing their positions.

It is supported by the large-scale infrastructure.

There are also a large number of market weight main lines that are supported by institutions, such as liquor, white goods, medicine, consumption, electricity, finance, petrochemicals and other sectors.

However, there will not be too many on-site funds that continue to flow out of the market.

In other words, in the market trend structure of stock game, the current volume situation is likely to remain stable.

As long as the volume can remain stable, the performance of the index will not be too bad even in extreme cases.

In general, while we shouldn't be overly optimistic at this point, we also don't need to be overly pessimistic. For core leading stocks with positive trends and strong momentum, we can aggressively follow the trend. However, for sectors or individual stocks that clearly lack the attention of major investors and whose momentum is difficult to sustain, we should avoid them accordingly."

"Brother Sun, you're talking about Beijiang Communications Construction, as well as the current film and television media, internet software, and internet applications sectors, right?" Zhao Qiang said with a smile. "Beijiang Communications Construction successfully hit its fifth daily limit today, completely breaking through the high-stakes limit set by Huawen Online. It's become a new monster stock in the market's major infrastructure sector. As for film and television media, internet software, and internet applications... although the market has always been quite enthusiastic, it's difficult for them to attract the attention of the real core capital groups in the market. I feel that if these sectors want to break out, they will need several waves of strong fluctuations to consolidate their chips."

Lao Qian took over and said, "The reason why the trends of film and television media, internet software, and internet applications are inconsistent and lack the attention of the core market capital groups is mainly because there are some problems with the fundamentals in these areas, right?

When the main line of major infrastructure projects broke out from the bottom, the chip structure was actually quite chaotic.

However, the fundamentals are strong enough, the domestic real estate market has exploded, and housing prices in various places have increased significantly.

Therefore, the main funds rushed in, causing this line to form a continuous upward squeeze trend until now.

There is also the new energy industry chain and the smartphone industry chain.

With the release of corresponding positive factors, these two lines have enabled everyone to see the expectation of a fundamental change.

This is why there is a continuous rebound and reversal trend.

So, in my opinion...

In fact, in the face of the big logic of fundamental changes, that is, the underlying logic supporting the rise in stock prices, the so-called chaotic chip structure is not a problem at all.

As long as the large number of main capital groups and the vast investor groups in the market are involved.

See expected changes in the future.

Then, the corresponding stock prices will naturally fluctuate and change.

The current poor performance of the film and television media, Internet software, and Internet application sectors is indeed in line with future expectations. There is no hope of a reversal, and without expectations, there is naturally no motivation for stock price speculation. Regardless of whether the valuation is high or low, it will be difficult for the stock price to rise.

Just like the liquor sector in the past two years, or the year before last.

Before the fundamentals of its industry reverse, the valuations of the corresponding core leading stocks in the entire liquor sector are already low enough, right?

And at that time, the overall market was still in a bull market phase.

However, no matter how abundant the overall liquidity of the market was at that time, these undervalued core leading stocks in the liquor sector always maintained bottom fluctuations and it was difficult to form a sustained upward breakthrough trend. They far underperformed the then market index and attracted criticism from countless investors.

Let’s look at the current liquor sector after the industry fundamentals have completely reversed.

It has become an area where many major capital groups in the market have concentrated their holdings, and the stock price and valuation continue to rise over time.

As for the stock of 'Beijiang Communications Construction'...

I am also optimistic about it.

In the current market, in terms of the potential of monster stocks, Beijiang Communications Construction is already ranked first.

After all, with the support of large-scale infrastructure, coupled with such hot market attention and the already small circulating volume, it is actually relatively simple to form a synergy.

Even for this stock today, the unusual movement is quite rapid.

The buying point was confirmed at the moment of the daily limit, but I was unable to keep up.

Although according to the current market and the expectations of the majority of investors, this stock is very likely to continue to hit the daily limit tomorrow.

However, the relay will be taken over tomorrow, but it will not be fulfilled until the day after tomorrow.

The risk is hard to say.”

After listening to Lao Qian's analysis, Zhao Qiang smiled and said, "If there are three, there will be five, and if there are five, there will be seven. According to the emotional feedback and trend logic of consecutive boards, since it has already broken through the five-board height space, then six boards will definitely not be a problem. As for the seven-board height, although it is not certain that it can be broken through, there will definitely be a premium when it opens the day after tomorrow.

On the whole, the stock of Beijiang Communications Construction will not be blocked at the daily limit when it opens tomorrow.

If there's a slight opportunity to enter the market, then in my opinion, it's a definite buying opportunity. If there's such an opportunity... I will definitely take some positions."

"Tomorrow definitely won't be the end of the story for Beijiang Communications Construction," Sun Chengyu said. "I haven't had time to arrange a position in this stock today. I'll see tomorrow. If the stock opens tomorrow and offers an opportunity, it would be appropriate to take a position and speculate."

"What do you think about the Tianci Materials stock?" Lao Qian paused and continued.

Zhao Qiang glanced at Tianci Materials, a stock that had also hit its daily limit, and responded, "I feel like this stock has room for growth and sustainability, but the market hasn't been very interested in it. Plus, there's institutional investment in this stock, so it's hard to say."

"Isn't it a good thing that institutional funds are involved?" Lao Qian said in surprise.

Zhao Qiang continued, "That depends on how you look at it. From an expected perspective, it's naturally a good thing. Compared to the current premiums paid by institutional investors, they are generally higher than those paid by speculative investors, making it easier to attract a large number of retail investors to follow suit.

However, due to the participation of institutions, the chip structure in the market has been disrupted.

No one knows who this organization is or what their operating ideas are.

Naturally, this leads to many active speculators in the market not daring to boldly guide the market trend or concentrate on pushing up the price.

Relatively speaking, the chips inside the Beijiang Communications Construction stock are definitely cleaner, and the market synergy is also better. The internal chip composition and the intervening capital composition of the Tianci Materials stock are too complicated. It is estimated that it is still difficult to form a consistent synergy and to develop a smooth continuous board trend.

I think, if we compare...

Tianci Materials should be benchmarked against stocks like Oriental Yuhong, Tianqi Lithium, and Ganfeng Lithium, rather than the "monster stocks" dominated by market speculators.

"Yeah, I think so too." Sun Chengyu pondered for a moment and then took over. "I feel that Tianci Materials' stock will most likely follow a trend and won't continue to hit the daily limit. In a sense, the funds that dominate Beijiang Communications Construction and Tianci Materials are of fundamentally different natures, and naturally their guiding methods and market trends are also completely different. Relatively speaking... Changying Precision's internal chip structure is actually much cleaner than Tianci Materials'."

Old Qian thought for a moment and said, "Mr. Sun, what you're saying is... relatively speaking, Changying Precision's stock has the potential to continue its upward trend and become a strong follower of Beijiang Communications Construction's stock in the market?"

Sun Chengyu nodded and said, "I think there is such a possibility."

"Although Changying Precision's stock performance has lagged significantly behind Beijiang Communications Construction, its position and driving force make it a leading stock in the core concept sector of the entire smartphone industry chain," said Zhao Qiang. "Plus, with Apple's new product launch coming up soon, strong positive news is expected. With funds from all sides converging, the possibility of continued speculation is indeed very high. I am also optimistic that this stock will become a strong follower of Beijiang Communications Construction."