Sticking together with high standards, the final act of stubbornness!

Today’s Index: [Taoguba]

Small gap down, upward attack, then sharp decline, midday pullback, and the afternoon continues downward by 1.26%. Notice that there was almost no resistance in the afternoon!

Breaking below the 120 line here results in a headless downward trend. I look at these because the big trend is irreversible; a reversal requires a lot of momentum!

There’s no need to panic too much here. As I mentioned in yesterday’s review, there’s a high probability that on Thursday the index will break below 4000 points, and on Friday, it will break below the 120-day moving average. After breaking through, all face and internal support are gone because many people believed that 4000 would be protected by funds, but after the break of the annual line yesterday, many mental defenses also shattered. This is bloodied chips. But volume is still insufficient. The decline isn’t over yet, but it won’t last too long.
The more it falls, the more valuable it is, but fewer people are watching. People prefer to see gains, not losses, which is the root cause of most losses. Opportunities are created through declines. Why does the market fall? Because it can’t go up anymore; valuations are too high and need to correct. After all, our tech companies’ profits are far behind American ones. Both claim to be indispensable parts of the supply chain, but their profits are negligible. So, our tech sector does the dirtiest, hardest work, earning only a tiny profit. The big gains still go to the Americans. Once valuations drop, they will gradually rise again.

In the morning session, there was some capital trying to repair the market. The index opened slightly lower , which I’ve been mentioning these days—being the strongest in the morning doesn’t mean it’s the strongest for the day. Funds briefly counterattacked in the morning led by communication stocks, and this move, along with the opening strength, once made people think it was a tech-led broad rebound, trapping many. We clearly wrote about this in the morning and then broke it down. Ultimately, it surged and then fell back.
Photovoltaic equipment kept moving unusually in the morning, especially some space photovoltaic stocks, indicating some funds had already taken positions early. At midday, a news story emerged—about Lao Ma’s procurement of photovoltaic components—which accelerated the decline in other sectors. The timing of this news was suspicious; quant funds had already taken their chips, leaving retail investors to ponder during lunch. It was well-known news, and many wondered: where will the funds for photovoltaics come from? Will it be new money? Unlikely. Funds will cut losses in other sectors and shift into photovoltaics. Many midday declines weren’t panic selling but active profit-taking to enter the photovoltaic sector. As the market continued to fall, photovoltaics also retreated. In the end, everything was a mess. But was this decline unpredictable? No!
From my recent articles, everyone knows that the market has been under control for two weeks, mainly trading with 2 to 4 layers of positions. In this market, there are many opportunities to trade when the trend is good, and fewer when it’s bad—that’s the truth. Don’t fight the trend. Since you’ve paid tuition, you should learn something from the market. If you learn nothing and stay the same, you’ll lose all your money.

Volume reached 175.8 billion, with a total approaching 2.3 trillion, which is still not enough. We need another surge in volume.

Regarding the morning session:

Thanks to brothers who still like and support at this stage. Your support is my motivation to keep going!

A clear note: breaking below 4000 points, combined with yesterday’s review, indicates that Friday’s 4000 needs a second confirmation. The market opened with tech stocks leading a volume-driven attack, but it was clearly not enough because it didn’t test the annual line. Personally, I think that since it has already fallen this far, breaking the annual line is inevitable. With this prediction, we know that we shouldn’t open positions casually in the morning. Moreover, currently, there’s no main theme; in a declining market without a main theme, what can we do? Hold onto the stocks with collective strength.
The extent of collective holdings in the market can be seen, and the future direction has already been told.

First, the direction I gave was storage, and on Friday, I wanted everyone to focus on support near the 5-day moving average, not chasing highs. Our strategy isn’t for the same day but for the next day because our trades are T+1. We can choose to buy storage stocks at the end of the day near the moving average to speculate on a rebound on Monday, as storage is one of the few sectors with rising prices in the tech direction. The logic is solid; low buying at the end of the day offers high cost performance.
Then, the chip sector’s collective stocks include Yazhi Integration, which is a leader and a core stock, and continued to rise today.

Second, the power sector. The core collective stocks here are unmistakable—HuaDian LiaoNeng, with good patterns, market cap, and concepts. When HuaDian advanced, it drove the entire sector to rebound. After HuaDian’s surge, many stocks hit the daily limit, but unfortunately, the market sold off in the afternoon. Power stocks, being defensive, couldn’t withstand the decline.

Third, I pointed out to everyone that AI hardware is the easiest to repair, but where’s the problem? Because it started to recover right at the open, and opened too high. In a weak environment, that’s not right. If the market is in an uptrend, such openings are fine. But given the current situation—60-day moving average resistance and unstable 120-day support—AI hardware’s strength usually only shows after 10:30 AM, not right at the open, as early moves tend to surge and then fall back.
Moreover, the AI hardware’s collective stocks include Yi Zhongtian, which became a collective target at the open, with a high gap. Since it opened high without a good entry point, we should mainly observe and act cautiously. If it opens slightly lower and gradually rises, it wouldn’t have gone this way.

In summary, again, avoid heavy positions and control your holdings. Even if there’s a daily limit-up, it doesn’t necessarily mean a premium the next day because you don’t know what the weekend will bring, making it easy to be passive. Brothers who still hold heavy positions on Friday should carefully read the morning session—not just glance but understand.

Position management plan:
Aoruide: On Friday, the computing power sector already showed problems at the open. As Thursday’s strongest sector, Aoruide and Meili Yun both performed poorly, and Hongjing was the same. So, there’s only one word: exit.
Aoruide -0.5, exit with 3 stocks. I initially expected a higher level, but with this market, no one was willing to take over. Its status isn’t strong enough. Meili Yun still has better momentum; the review also mentioned that it needs high volume to break previous highs. The volume was there but no limit-up, so it remained relatively strong throughout the day.
Hongjing Technology: I kept an eye on it until midday, when there was a 4-point cushion. When the photovoltaic news came out at noon, I had to reconsider Hongjing’s direction. I previously analyzed that many funds would cut losses to photovoltaic stocks, so at midday, I exited Hongjing, only taking 2 points profit.

New stocks opened that day:
Zhaoxin Shares, almost a limit-up. I bought it earlier when it hit the limit, then sold for arbitrage the next day. After a two-day correction, it hit a new high. That’s my standard buy point. I also wondered if I should just hold without moving, as it might hit a new high anyway. But looking at the declining stocks, I realized most are falling continuously.
HuaDian LiaoNeng: This stock was a collective target today because the overall market was weak, and many stocks with less recognition were under pressure. The limit-up wasn’t high, and only one other stock from the three-board group was strong, so there was likely a collective effort to push it higher. It dipped at open and then recovered, with high volume, but the market cap is small. It needs to turn weak to strong on Monday.
Xiexin Nengke: This stock also had news at midday, surged in the afternoon, then pulled back. I entered, aiming for a breakout, but when it was about to hit the limit, it started to fall again, leading to a high and then a retreat. There’s still over a point of risk here. It’s okay not to open positions, so I warned in the comments that it’s risky and not to follow.

I opened three small positions, mainly for speculation. Everyone must learn to control their positions, especially in bad markets—this is when your account declines the fastest.

The Easter egg was also released that day. I initially wanted to buy First Open Shares but hesitated because it wasn’t strong enough. The weekend’s IPO of Yushu was starting, so I missed out a bit.
Shaoneng Shares was another Easter egg, but I think the risk was too high, as it was about to hit a one-word limit-up.
6 out of 2, actually, it’s better not to trade! Staying fully in cash is the best choice.

There weren’t many certain opportunities that day. Instead, buying space photovoltaic stocks at the end of the day might be a good move. These are actual orders filled; chasing during the day isn’t ideal, but grabbing at the end of the day is good, especially for Mawei and Jiejia.

That day, 10 photovoltaic stocks hit the limit-up, but none of these are core stocks of Lao Ma. Many stocks moved stronger before the news, meaning even without news, photovoltaic energy storage stocks would perform well. After all, CATL and Sungrow kept rising at the open. Lao Ma’s small article was posted at 10 AM, and most retail investors only found out after the midday close.
The logic and sustainability of photovoltaic stocks are there, but many stocks showed long upper shadows, indicating trapped positions. For Monday’s open, will it gap down to shake out weak hands or open high and surpass previous highs? Think about it. Just like Thursday’s Reikangda, which opened strongly on Friday but eventually fell back 15 points, leaving many caught off guard.

The power sector is also limited now. The collective stocks like HuaDian LiaoNeng need to weaken and then turn strong on Monday. If they open at the limit down, don’t trade that day; wait for the market to continue falling and trigger panic selling.

Other sectors don’t have much to say. As I said, the US-Iran conflict keeps escalating, the Fed might not cut rates but raise them, Europe is also raising rates, causing liquidity issues. Since the big A-shares are in a downtrend, future operations need to be more cautious.

Summary! Opportunities are created by declines. Opportunities always favor those who are prepared, but don’t blindly bottom-fish! Once the 120-day line is broken, support turns into resistance! In a weak environment, holding collective stocks might continue to strengthen. Just pay attention to the rhythm.

Brothers who want to improve—swap sesame for watermelon!! 100 points or keep going! Long-term persistence is needed. You want answers, I want data. Support each other. Thanks!!!

Writing is hard—brothers, like, tip, comment, cheer, and support. Thank you. I have no theories, only practical experience.

Together in the stock market, sailing far and wide.

Respect the market, follow the market.
Focus on main themes, watch the core.
Don’t rejoice at rises, don’t mourn at falls.
In the vast water, seek a sip.
Plan your trades, unify knowledge and action.
Always remember: steady profits.