Index breaks support, hold the core trend!

【Like and Follow, Limit Up Can’t Stop Us】[Taoguba]
【Cheer and Tip, Both Holdings Rise】

This week’s market has indeed been tough, but I believe brothers who are committed to the core electric cooperation theme, as long as they buy back key stocks at low points after pullbacks, avoid chasing highs and hitting the limit, can still gain something. Of course, what’s more difficult than the market is the increasingly strict regulation from JG. From the weekend when Yunnan Energy still got a continuation after a limit-down to Monday night when even Tainpu, with grass two meters high on its grave, can re-enter the JG pool, the pressure from JG has prevented high levels from forming. Without high levels, the market can only have width, turning into a breeding ground for quantitative harvesting.

Similarly, due to undisclosed reasons, next week’s review can’t be as detailed as before. But loyal fans who check the reply area daily should know that I’ve been repeatedly rotating within Huadian Energy all week. After Shun Na’s low point on Tuesday, it didn’t break out into the expected leading trend, so I unfollowed it on Thursday. Besides that, only Friday’s Neng Electric’s contrarian surge and sector rebound caught my attention. Let’s review this week’s market together.

1. Weekly Market Review

Monday:

Last Friday, I mentioned that funds chose to cash out to avoid weekend uncertainties, leading to a double adjustment in indices and sentiment. Hanlan and Yunnan Energy, both with high potential, also suffered limit-down that day. Over the weekend, conflicts continued to intensify. On Monday, the index opened lower and continued to decline. Yunnan Energy, despite a limit-down on Friday, was still continued to be bought up, resulting in two consecutive limit-downs on Monday. It shows that regulation has not eased at all.

In the afternoon, the rescue of the index was not from the core electric cooperation theme but from the sudden rise of storage chips, with multiple stocks hitting the limit, and the sector surged 2.5%. This was partly driven by expectations of Nvidia’s conference.

Many brothers asked whether storage could be played at this time. I firmly said that the storage sector did not meet the 10+300+3 condition. Even if we broadened the scope from storage to the entire chip concept, with more than 10 stocks hitting the limit, including 20cm-long Langke Technology and Jintai Solar, the highest sector leader was only Yaxiang Integration with 2 limit-ups, which still did not meet the 3-limit-up condition.

Similarly, the chemical sector showed some performance but was limited to local stocks like Sanfangxiang and Jinniu Chemical, also not meeting the 10+300+3 condition. So my attitude at the time was to pay little attention to chips and chemicals.

In contrast, the electric cooperation branch within the core electric sector had 8 limit-ups. If we expand the scope to include green power and wind power, the entire electric cooperation sector had over 10 limit-ups, with some stocks reaching more than 20cm and 3 limit-ups. It’s important to note that the electric cooperation theme has been in major divergence since last Friday. Despite the divergence, it still maintained the 10+300+3 echelon condition, which is why I keep emphasizing that this is the cycle for electric cooperation.

Tuesday:
At the open, storage chips from Nvidia’s conference were heavily liquidated, with a large red candle engulfing Monday’s green. Although Yaxiang Integration advanced to 3 limit-ups, the number of limit-ups was small, and there were no stocks hitting 20cm limit-ups. On the other hand, the core electric cooperation theme saw a quick rebound after opening, with Shun Na surpassing expectations with a 2-limit-up new high. Hanlan, which previously failed to reach high levels, was now being relied upon by funds.

Unfortunately, dragged down by the index, the sector experienced a weak recovery and was reversed. But even so, any rebound in the sector satisfied the 10+300+3 echelon requirement. Persisting with the core electric cooperation theme is not wishful thinking; it’s clear that aside from the impact of conflicts, the only sector capable of sustained profit is electric cooperation.

Wednesday:
Electric cooperation tried to rebound again at the open, but the effort was weak. After a weak start, the index continued to decline. In the afternoon, storage chips continued to strengthen, pulling the index back, closing with a very thin lower shadow. At this point, some asked again if storage was about to break out. However, the 10+300+3 condition was still not met. Several stocks reached 300 limit-ups, but Yaxiang Integration hit a limit-down again, and the number of limit-ups was still insufficient. Overall, this sector saw a big surge on Monday, a red reversal on Tuesday, and a rebound on Wednesday—quantitative cycles of repeated harvesting, unlikely to form a climate.

On the main line, the electric cooperation sector was still recovering, but the problem was obvious. The high-flying stocks on Monday and Tuesday, like Shun Na, fell on Wednesday despite the sector’s recovery. This raises a question: if stocks like Hanlan and Yunnan Energy failed, and Shun Na also fails, does that mean high-level stocks cannot be crossed over from the previous cycle? Then only stocks born before the end of the rising cycle can be expected. However, on the same day, Jinkai New Energy actively surged and hit the limit, indicating that even if Shun Na isn’t doing well, funds will continue to try near-term stocks.

Thursday:
Initially, I thought that after the extremely thin lower shadow on Wednesday, Thursday could confirm a turning point with a volume-increasing bullish day. Many funds shared this expectation. So, the core electric cooperation theme surged strongly at the open, with Jinkai New Energy hitting a new high. But other sectors were mixed. For example, storage stocks, which formed a bullish engulfing pattern on Wednesday, plummeted today; chemical and oil & gas stocks, benefiting from conflict-related news, opened high but then declined.

The final result was that after a low-open rally, the index lacked strength to push higher and fell back. The sector that initially surged at the open couldn’t resonate with the market and also fell back. The market declined broadly, with nearly 5,000 stocks falling, and the index once broke below 4,000 points at the close, showing signs of panic. The number of limit-down stocks increased from zero to five. Notably, Shun Na weakened again, confirming its weakness. Meanwhile, Huadian Energy surged sharply, a stock born after the end of the rising cycle.

Although the index closed above the February 3 low of 4002, this level cannot confirm a downward break or a trend reversal. The final direction will be decided on Friday. Data shows Thursday was a bottom, with the limit-up echelon not only breaking the high but also some stocks breaking the three-limit-up level. Since the index has not confirmed a downward break and sentiment has bottomed with some recovery expectations, there is a chance for a strong rebound on Friday.

Friday:
If this week was the biggest test of whether the main theme can be maintained, then Friday was the most challenging day. Its movement was not simply about success or failure but involved tug-of-war. Just look at the rhythm of the market on Friday.

The opening seemed to resonate and rally, but in fact, the ChiNext tech stocks were frantically chasing liquidity. Currently, the market’s volume is insufficient to support such a crazy rally. Ultimately, the tech giants surged, but the liquidity siphoned from the power sector caused it to fall back, dragging the broader market down with it. From this, we see that funds do not support tech stocks to rally together; otherwise, the index would have risen further during the surge, not plunged. Near midday, the photovoltaic sector exploded, with Neng Electric rebounding, and the electric sector reflowed, pushing the index back into the green. It’s clear which direction the market recognizes.

Unfortunately, in the afternoon, sectors retreated again, and the index fell sharply, filling the 3977 gap and ultimately losing the 4000 mark. At this point, it’s no longer meaningful to guess the bottom from the left side; it’s better to stay defensive and patiently wait for the index to find its bottom.

2. Outlook for Next Week

Originally, I thought this cycle would be as difficult as the early stage of the aerospace cycle, but I underestimated it. During the aerospace cycle, the index was at least oscillating within a range, but now it’s breaking down sharply. The expected easing of external tensions did not happen; instead, conflicts worsened, and soaring oil prices caused inflation, eliminating the Fed’s rate cut expectations. This is the main reason for the continuous adjustment this week. Of course, regardless of the cause, when the index stays below the moving averages, it indicates that funds are mainly defensive. Some blame the market’s inability to reach new highs on regulation, but the main reason is probably that funds have shifted to a defensive stance.

With the index continuously adjusting, oscillating between cold and warm, left-side predictions of a bottom are no longer meaningful. Patience is needed until the index naturally forms a bottom. Two signals are worth paying attention to if they appear. The first is the combination of extremely thin volume stabilization and a new volume-increasing bullish daily K-line, which was possible after Wednesday’s thin-volume stabilization, but unfortunately, Thursday’s decline prevented it. The second is a large-volume bullish day with a big upward move—any sufficiently large bullish candle can change perceptions. Whichever signal appears, the direction that resonates with that day’s bullish move will be the core direction in the next phase, most likely within the electric cooperation theme.

If I had to make a prediction based on cycle theory, the previous cycle from January 13 to March 9 was a rising cycle corresponding to index oscillation. The rise cycle ended on March 10, and the market entered the initial phase of electric cooperation, with the index shifting from oscillation to a downward break. It has now been 9 trading days. When it reaches 13 days, will a trend change occur into the next phase?

That’s all for this week’s review. Creating content is not easy. Thanks to brothers who like, tip, and comment every day. If this article helps you, I hope you can support me with likes, tips, and encouragement.

Next, the reward leaderboard:
Weekly review leaderboard:

Dragon 1 @horse1010 5000 points

Dragon 2 @作手龍七 2000 points

Dragon 3 @红警666 1000 points

Support leaderboard:

Thanks for brothers’ support! Welcome @念缪 @啊民哇 @老吴炒股日记 to join my gold fan family! Current members: @深泉A @洪州鸣哥 @大明白8 @奋告大师 @nikkkkki @一郑锋 @核桃的大兜子 @扑街007 @年华果粉 @六脉达摩神箭 @bjt789 @山水有相逢XS @风行a股 @移动sd @济南小宋 @余砚秋 @花开半夏666 @雨夕 @随大侠 @cassssper @超短看主升 @五花膘 @谷一法师 @坐着坐着就开窍了 @池老哥 @豹哥1991 @红警666 @乾隆世家123 @念缪 @啊民哇 @老吴炒股日记，感谢大佬们的支持和信任！

Finally, I regret to inform everyone that due to force majeure, I will no longer be able to share my daily trades in the reply area starting next week. The first part of the weekly review has also been significantly revised today. Unfortunately, JG is tightening regulations more and more, not only on stock movements. Anyway, I’ve always tried to provide both fish and fishing. I hope everyone continues to support me. At least in the fishing part, unaffected by JG, I will still teach everyone wholeheartedly.

For example, why try Hanlan and Shun Na, what does it mean if Hanlan and Shun Na don’t break out, why I favor Huadian based on cycle nodes—these were shared with everyone last weekend. Combining this week’s market trend and feedback from Jinkai New Energy and GCL System, do you have a deeper understanding of the cycle? If you gained something, please support with likes, tips, and encouragement!

【Disclaimer】: All stocks mentioned in this article are for observation and research exchange only and do not constitute any investment advice. The stock market involves risks; invest cautiously!