3.11 Sector rotation, stock consolidation

Good evening, everyone! [Taogu Ba]

The most obvious feeling today is that sector rotation has sped up.

Many sectors surged, such as electrical computing, but if China Construction Bank didn’t buy in, and it moved to the back seats like GCL System Integration, it would be halted the same day.

The reason for halts is still that intra-day sector strength can’t be sustained. Some lagging stocks, without support from smaller players, see no intra-day premium and rush to sell.

For example, in the computing power sector, Huasheng Tiancheng experienced two pulses in the morning followed by consolidation. Previously, it might have hit the daily limit, but in this environment, it fell sharply in the afternoon.

Sector rotation is severe.

However, there is a phenomenon of group formation, so on the market level, it’s not too difficult to trade, but attention should be paid to entry methods—avoid blindly chasing gains or cutting losses.

Review of today:

Huagong lowered restrictions (surged in the morning + late in the day)
Storage sector lowered restrictions (surged near noon)
Hanlan delisted
Shun Na T

Detailed ideas will be summarized on Friday.

Thoughts for tomorrow:

1: Recently, there haven’t been any standalone sectors listed, mainly because of the rapid rotation.

Most sectors follow a similar pattern: after news catalyzes the first day, they follow the intra-day main trend; on the second day, profits are realized, and the lagging stocks lack premiums; on the third day, the adjustment continues, with strong stocks experiencing a dip; on the fourth day, they are gradually pulled back by quant funds.

This general pattern can be referenced.

For example, last Thursday’s LED sector was very typical.

2: Group formation:

The best trading opportunities are in sectors with continuous main themes. Next are sectors without continuous themes but with group phenomena.

Group formation refers to stocks that outperform the sector significantly, such as Huasheng Tiancheng in computing power. Comparing its K-line with other stocks in the sector like Dongyangguang and Youkede, which show two bearish days, while Huasheng Tiancheng shows two bullish days—that’s clearly group formation.

Every sector has stocks that form groups, which makes the hot stocks on Tonghuashun look decent.

For example:

• Computing collaboration: Shun Na Co., Yunnan Energy Holdings
• Computing power: Huasheng Tiancheng
• Hardware: Huagong Technology
• Photovoltaics: Guosheng Technology
• Aerospace: Aerospace Development

Today, a brother asked when the group phenomenon usually ends.

A note: if a strong profit-making effect develops, and especially if a new low-priced theme emerges, it can disrupt the group. Also, if the index drops sharply, the group may experience a follow-up decline the next day.

Of course, these are considerations for later.

3: Electrical computing collaboration

The logic is solid, like commercial aerospace, which was first proposed and then experienced a small rally, followed by a collective explosion in December.

Recently, the group has responded well. Worth paying attention to whether Shun Na, GCL, and similar stocks will mimic Yunnan Energy or Hang Electric, trending upward.

There are two good points about the sector:

① The formation point: March 4, when the index stabilized and stopped falling, coinciding with the retreat of oil and gas.

② It has shown some persistence, unlike LED or lobster sectors, which exploded on the first day and collapsed the next.

The sector’s K-line is near the five-day moving average, with some core stocks like Shun Na and Jinkai experiencing two days of correction, with chips settling in place.

Whether it moves up or down, the next couple of days are critical.

In the lower left corner of the article, there are 7 fuel coupons. Let’s work together—just seven, thanks for everyone’s support.

This article is only a personal review and does not constitute investment advice. Investing involves risks; please proceed cautiously.