Rebirth of the Capital Legend

"For the stock of Beijiang Jiaojian, there's no need to rush to push it to new highs. As long as it can stabilize the market and avoid extreme losses, I think it can bring a relatively positive sentiment feedback to the entire market," Li Jinshi said. "As long as the market sentiment feedback is positive, the oversold rebound of small and mid-cap stocks can take place."

"That's true." Chen Guiyun nodded slightly and said, "As long as Beijiang Jiaojian's stock stabilizes and doesn't drag down the current market sentiment, the active funds in the market will naturally flow out of the main heavyweight stocks and switch between high and low, speculating on some oversold stocks with high attention. Judging from the current market support for Beijiang Jiaojian's stock, it seems unlikely that this stock will continue to plummet. After all, the heaviest selling pressure has been almost completely exhausted in the early trading and the rapid drop just now."

Liao Guoxiang glanced at the market data of the two exchanges, paused, and continued, "Overall, the active funds in the market do show signs of shifting between high and low levels. Major sectors such as consumer goods, infrastructure, finance, petrochemicals, and power equipment... these heavyweight sectors should take a break."

"Yes, along with the recovery of the intraday losses of Beijiang Jiaojian stock..." Li Jinshi nodded and continued, "Shuguang Shares, Taihe Shares, Changying Precision, Shougang Group, Huaxin Cement... these stocks have also gradually recovered their losses. Among them, Taihe Shares has once again hit the daily limit."

"Tianci Materials is still the strongest stock." Chen Guiyun glanced at the top-ranked popular stocks on the two exchanges and sighed, "This stock showed a very high level of initiative today. Although it didn't open very high, the buying support was quite strong. I feel that this stock still has a lot of room for speculation, and its fundamentals seem to be improving rapidly."

"Yes, Tianci Materials seems to be the leading stock in the entire new energy industry chain," Li Jinshi said. "Its upward momentum is much stronger than that of Shuguang Shares, Tianqi Lithium, Ganfeng Lithium, and Duofuduo. Of course... this is also due to the fact that this stock has the smallest circulating shares, the most active trading, and the cleanest funds in the market."

"It seems that the new energy industry chain will take center stage today," Chen Guiyun said with a smile.

Li Jinshi continued, "This is not surprising. Yesterday, this line, along with the collapse of Shuguang Shares, was already somewhat oversold. Today's appropriate rebound is to be expected."

"However, it seems that although Shuguang Shares has received a lot of market attention, the active buying power on the market is still lacking, and the divergence in the market is really large," Chen Guiyun said. "The trading volume has been maintained at this level, but the market has not made much progress. With such a large divergence and such great market pressure... I feel that this stock is very likely not going to go far."

"In terms of the cost-effectiveness of speculation..." Li Jinshi said, "I think Shuguang Shares is far inferior to Tianci Materials."

Liao Guoxiang stared at the stock trend of Tinci Materials, paused, and said, "If you are optimistic about Tinci Materials, you can try speculating on a similar stock, Dofluoride. Comparing the performance of these two stocks last year, Dofluoride is currently lagging behind Tinci Materials in terms of gains and valuation. Of course, Dofluoride has a much larger circulating share and market capitalization than Tinci Materials, so its upside potential is definitely less. However, its stability and safety should be higher at this point in time."

"I remember that last year, the 'Fuxing Road' fund heavily invested in Do-Fluoride Chemicals, right?" Chen Guiyun said. "Looking at it this way... if market sentiment continues to focus on the new energy industry chain, it's possible that the 'Fuxing Road' fund will rebuild its position in Do-Fluoride Chemicals. After all, generally speaking... many top speculative funds in the market still like to speculate on their old favorites' stocks when the market sentiment shifts. Speculating on these kinds of stocks makes it easier to grasp their characteristics and guide market sentiment."

"Hasn't 'Huayi Capital' already heavily invested in Tianqi Lithium and Ganfeng Lithium?" Li Jinshi said. "Dofluoride is a core stock in the new energy industry chain. I feel that 'Huayi Capital' may have already established a certain position in this stock. It's just that the stock hasn't been listed on the daily trading data recently, so no one knows who the main force driving the stock's price movement is."

"Regardless of whether Huayi Capital has invested in Do-Fluoride Chemicals or not," Liao Guoxiang said, "it doesn't affect the fact that this stock, at the current juncture and given the market trend, offers considerable speculative value."

"Since Brother Liao is so optimistic..." Li Jinshi smiled and said, "Then I'll try taking in some shares."

Chen Guiyun smiled and asked, "Brother Liao, have you sold your shares in Lixun Precision? Are you planning to reallocate your holdings to the new energy industry chain?"

Liao Guoxiang said, "The upward trend of Lixun Precision stock has not ended, and there are no signs of a trend breakdown. There is no reason to sell. I haven't touched my position in Lixun Precision stock yet. The Apple supply chain may see some profit-taking due to the upcoming Apple product launch. However, judging from the market trend, despite the general expectation of profit-taking, the internal shareholding structure of Lixun Precision stock has not only not dispersed, but is actually becoming more concentrated. This abnormal trend and shareholding structure change makes me think that this stock is likely to have a stronger upward trend yet to emerge. So... it might be better to wait and see."

"Brother Liao's patience in holding positions is truly different from before," Chen Guiyun praised. "I'm not too keen on investing in the Apple supply chain, but Lixun Precision's stock does stand out from the crowd and feels unique within the entire Apple supply chain."

"If it's a shift from high to low, and a rebound after a sharp drop, then we should speculate on the sectors and stocks that have suffered the most losses in the market," Li Jinshi said. "Do you think there are any major speculative opportunities in the three sectors that have suffered the most losses—film and television media, internet software, and internet applications—today, or in the next couple of days?"

Chen Guiyun thought for a moment and said, "I feel that it's still quite difficult for these three major sectors, as well as the entire technology sector, to quickly stage a strong rebound. After all, although from the current market perspective, many active funds are flowing out of core heavyweight sectors such as infrastructure, consumption, finance, petrochemicals, and power, and simultaneously flowing into sectors that haven't risen much or have corrected too much in the early stages, such as the new energy industry chain, Apple industry chain, steel, coal, non-ferrous metals, film and media, internet software, and internet applications, it's also clear that the internal shareholding structure of the heavyweight stocks in the core consumer and infrastructure sectors, especially the holdings of a large number of major institutions, hasn't loosened significantly."

Since the main players' positions have not loosened, it will be difficult for them to continuously inject funds into these weak main sectors or non-mainstream, unpopular main sectors.

However, there has been no continuous injection of major funds...

This means that these key sectors lack sustained active buying support.

Without proactive buying support, the stock price will find it difficult to make room for further gains. It is highly likely that the price will only recover slightly from the oversold condition due to a brief rebound in sentiment, without encountering the huge resistance from trapped investors above or the massive selling pressure.

I still think it's time to establish new positions.

We still need to start from the major infrastructure, major consumption, new energy industry chain, and smartphone industry chain, and work around these main lines.

Once you over-diversify your portfolio into oversold, unpopular sectors or stocks, it's a sign of a market downturn.

Even after market sentiment calms down slightly, it will still be a rather risky situation.

Overall, although market sentiment is changing rapidly, the actual trading volume remains largely unchanged, indicating that the market is still characterized by a zero-sum game with limited new capital entering the market.

"Old Chen's analysis is good." Liao Guoxiang nodded and said, "Even if you want to speculate on stocks that are 'oversold rebounding,' you should focus on the main themes of major infrastructure, major consumption, new energy industry chain, and smartphone industry chain. After all, in the current market, in the context of continuous zero-sum game, only these few lines can form a relatively consistent medium- and long-term expectation and trend, and can form a linkage trend of multiple stocks."

Other sectors include film and television media, internet software, and internet applications.

Or sectors like steel, coal, non-ferrous metals, and petrochemicals.

Even if one or two stocks manage to stand out independently and briefly generate market profits and bullish sentiment, without the support of a leading sector and the continued联动 (linked) movement of other similar stocks within that sector, it's practically unrealistic to expect this speculative sentiment to be sustained.

After all, it's about investing in so-called "lone wolf" stocks that lack any real correlation.

Many short-term investors in the market still have significant psychological concerns, and dare not increase their positions or actively guide the market to create upward space.

However, the situation is completely different if we consider the core and popular themes of the market, such as large-scale infrastructure, large-scale consumption, the new energy industry chain, and the smartphone industry chain.

First of all, these major sectors are where major institutional investors are currently focusing their funds.

Moreover, this trend of clustering together is unlikely to reverse before the fundamental trends of various industry sectors come to an end. Furthermore, institutional funds have intervened too deeply, and even if they want to take profits and adjust their positions, it will take a long time and a considerable amount of market space.

Furthermore, its own chip structure is stable.

Furthermore, a large number of previously trapped positions have loosened significantly.

Therefore, it will be much easier to drive up the prices of stocks within these sectors.

Furthermore, for those outside the market who are observing, there are stocks such as Beijiang Jiaojian, Oriental Yuhong, and Conch Cement as high-end benchmarks.

When they follow the trend of these stocks, they will have fewer concerns.

In other words, in terms of factors such as emotional appeal, capital accumulation, and herd mentality, these core popular themes at low levels are easier to attract.

We all know that markets always move in the direction of least resistance.

Therefore, even if the market experiences a high-low divergence, it will likely concentrate on these stocks.

"Yes, I agree," Li Jinshi said with a smile. "Old Liao's insight is truly remarkable. In terms of market 'high-low trading,' and given its close alignment with the main theme, strong future prospects, high market attention, and strong ability to attract followers... considering all these factors, there shouldn't be a more suitable target than 'Taihe Shares,' right?"

"That's for sure," Chen Guiyun said. "However, in just this short time, Taihe Shares has already hit its daily limit up. Even if you wanted to get involved and establish a position, it's impossible now. As a second choice, what do you two think of Penghui Energy?"

Li Jinshi glanced at the stock chart of Penghui Energy and said, "Today, the new energy industry chain is the main focus. I think there's nothing wrong with the stock's trend, and it's okay to take some positions. However, the circulating shares and market capitalization of this stock both exceed 100 billion, which seems a bit too large. I wonder if the active speculative funds flowing out from other major themes can support such a large market capitalization?"

"A market capitalization of 100 billion should be alright, right?" Chen Guiyun said. "I mainly think that the market enthusiasm for this stock is not low. At the same time, compared with stocks such as Tinci Materials, Tianqi Lithium, and Ganfeng Lithium, its relative position is still very low, and its fundamentals are also good, so it has good room for speculation."

Liao Guoxiang pondered for a moment and said, "I think it's a good idea. We can guide you to try it out."

"Okay." Chen Guiyun nodded.

Immediately, he focused on the stock price movement of Peng Hui Energy and the follow-up buying. In the instant that Tianci Materials and Shuguang Shares rose together and the stock price surged, he also immediately invested nearly 1000 million yuan in Peng Hui Energy.

The 1000 million yuan was invested instantly.

On the Peng Hui Energy trading platform, he swept away nearly 30 sell orders at the previous price levels.

Following this, with the help of other follow-up selling, Peng Hui Energy's stock price instantly jumped from the original 2% increase to a 5% increase.

And with the stock price soaring.

The stock's market investor attention also surged instantly.

"Haha, not bad, Lao Chen, this looks promising." Noticing the changes in Peng Hui Energy's stock price movement after Chen Guiyun placed a massive buy order of 10,000 lots, Li Jinshi laughed and his eyes lit up instantly. "The follow-through is good, it feels like we can keep pushing it up. I'll give you a hand."

He finished speaking without waiting for Chen Guiyun's response.

Li Jinshi quickly invested around 10 million yuan in Penghui Energy's stock, rapidly driving its price up violently from 5% to 1%.