[Red Envelope] Hold coins for the holiday or hold stocks for the holiday? Rational analysis is here!

The halo of technology dyes the index red, but cannot illuminate the dark corners of emotions. The last page before the holiday is filled with “if”: if volume increases, if recovery happens, if the US stock market remembers us. [Taogu Ba]

Review on 2026-02-12

1. Market Review

Influenced by the significant rise in US tech stocks last night, technology stocks opened high and strengthened in the morning, seizing liquidity that was already limited. Trend battles and sentiment battles are inherently competitive, and today’s continuation of divergence in sentiment was expected. After liquidity was taken, short-term sentiment divergence increased sharply, beyond normal expectations. Over the past two days, AI videos, as the main sentiment carriers, became the primary victims, with a broad sell-off after the open, multiple stocks hitting the limit down, causing a collapse in short-term sentiment. The index remained in the red driven by tech. Under the influence of a steady index, individual stocks in the two markets recovered from a decline of over 4,000 to a mixed gain and loss, but overall, short-term sentiment did not show clear recovery, and sentiment battles were significantly weaker than the overall market. In terms of sectors, optical modules, computing power leasing, and smart grids performed relatively strongly, while commercial aerospace saw a passive slight rebound, and AI videos led the decline. Market rotation was rapid and highly random; although trading volume slightly increased, the momentum was limited and did not reverse the situation. In the afternoon, the market continued to fluctuate. The Shenzhen Component Index rose to the resistance level mentioned yesterday but was met with resistance, and the overall market’s yellow line continued to fall, with more stocks declining at the close. Overall, today’s index performance was decent, but short-term sentiment was very poor, leading to localized extreme loss effects.

The total daily turnover in both markets was 21.417 billion yuan, an increase of 157.5 billion from the previous trading day, up 7.94%. There were 2,108 stocks up and 3,280 stocks down.

2. Market Analysis

Today, the index continued to fluctuate normally within a reasonable range, and the previous structure remained intact. Due to the pre-holiday effect, trading volume had been expected to stay relatively low, but today was the last day for fund withdrawals, ending this expectation. Whether volume will rebound later depends on holiday-related news, but generally, the probability of post-holiday rebound is higher. Under low volume, the index structure is less likely to be broken, and support and resistance levels are more effective. However, if volume begins to increase, it could test key resistance or support levels or recover critical zones. Over the past three or four trading days, the index has shown slight oscillation, which can be seen as a directional choice sentiment fluctuation. If volume increases after the holiday, whether upward or downward, it could sustain some momentum. Predicting which direction is more probable is difficult because of the longer timeframe, as Western markets remain open, and overall market performance during the holiday period will also influence the market. Holding stocks or cash over the holiday involves risk; there is no definitive answer. If holding stocks over the holiday, it’s better to choose sectors with strong long-term logic and industry fundamentals that are hard to disprove, less affected by short-term negative news.

Since some funds might start taking early positions to bet on a rebound after the holiday, there is a condition for a slight liquidity rebound tomorrow. If there is a significant increase in volume, whether up or down, intra-day momentum could persist, but this only applies to the day itself and does not affect post-holiday expectations, which are mainly influenced by holiday news and external factors. If the market maintains around 2 trillion yuan in turnover, it will likely continue to fluctuate mildly.

3. Sentiment Analysis

Today, driven by the rise in external tech stocks, the recovery of A-share tech stocks was significantly accelerated, seizing liquidity and causing sentiment divergence to exceed normal expectations. Yesterday, we mentioned that sentiment can have room for continuation and divergence. If Kanyue Technology and Dawei Technology did not open limit-up bids, the divergence could have lasted longer. However, the actual divergence today was far beyond expectations, with the turning point around 9:18 AM during the bidding when Huanrui Century was pushed to the floor, confirming the main tone of sentiment suppression today. The unexpected severity caused extreme loss effects within the day, especially among leading stocks and previously lagging mid-to-high cap stocks like Hengdian Film, Mingdiao Shares, Fenglong Shares, Bona Film, etc., which are typical examples. We also warned early in the bidding that sentiment was weak and below expectations, requiring further divergence release.

Under this pressure, major stocks and Kanyue Technology refused to open limit-up bids, so the expectation of opening limit-up and turnover remains for tomorrow. This indicates potential for further sentiment divergence. If funds can seize this node and trigger a strong recovery, sentiment battles could continue. If funds refuse to recover or the recovery is very weak, the risk of continued sentiment decline increases. Overall, as long as there are no clear signs of sentiment recovery, it’s better to adopt a defensive stance.

Moreover, there is an awkward holiday node: post-holiday sentiment is heavily influenced by holiday news, which far exceeds the influence of sentiment itself. This makes it difficult to predict the development path of sentiment in advance. Even if sentiment shows some recovery tomorrow, participation in the battle depends on individual judgment.

In summary, due to potential holiday news factors, the effectiveness of sentiment projection is limited to tomorrow only. No phased expectations can be made; this is a special situation. For short-term sentiment traders, it’s not recommended to hold heavy or full positions over the holiday; it’s better to reserve some positions to catch potential new strong sectors after the holiday, which would allow quick entry if opportunities arise.

4. Sector Discussion

1. Computing Power

Mali Cloud directly hit a one-word limit-up bid, showing an unexpected strength in the computing power sector. Coupled with the overall strong performance of tech today, computing power continued to ferment and became relatively strong intra-day. However, the sector has risen for four consecutive days, and major stocks lack a turnover rhythm. If no further unexpected signals appear tomorrow, the sector is likely to show divergence or a process of differentiation. The logic is that recent favorable factors include interconnection of computing power and AI-driven demand growth, which are solid fundamentals. Whether the sector can sustain performance after differentiation depends on whether Dawei Technology can withstand volume divergence and on holiday news effects. Overall, before Dawei Technology’s volume breakout, there are no new entry points. The next phase awaits Dawei’s volume breakout to test the trend.

2. Smart Grid

Also relatively strong today, influenced heavily by news catalysts. When good news appears, the sector tends to perform well, but after the good news is realized, there are often several days of cooling-off, and sustained explosive power is limited. Such sectors are generally not suitable for chasing after a big rise the next day, especially during periods of significant sentiment divergence, which increases trial-and-error costs. Plus, holiday news uncertainties make it less suitable to hold positions in such sectors. Tomorrow, the market is likely to see weak retention of chips, with weak participation from new funds.

3. Tech Chain

Recently, the main mid-term logic for tech sectors involves optical modules and storage chips. With US optical module leader Lumentum entering a main rally, A-share optical modules have also performed relatively well. Previously, due to expectations of continued low volume, tech stocks struggled to rally strongly and mostly oscillated. However, this liquidity contraction is expected to improve after the holiday. If the market shows volume-driven upward movement post-holiday, tech stocks are likely to be a key direction. Conversely, if the index underperforms expectations, tech stocks could be among the first to suffer. Tech stocks are heavily influenced by US markets; holding tech stocks over the holiday is essentially a gamble on whether US tech stocks will rise during the break. This period is long and difficult to predict. From a short-term perspective, holding tech stocks over the holiday is a high-risk gamble; from a medium- to long-term view, tech remains one of the most promising sectors with clear expectations. Overall, this sector is hard to predict. As mentioned many times, it’s more suitable for left-side trading—buying during dips. Once it has risen, chasing becomes passive and purely a gamble.

4. AI Videos

AI videos were the biggest victims today, with widespread losses and performance far below expectations, which also lowered subsequent growth expectations. We warned early before 9:25 that divergence was beyond expectations and that we should wait for Kanyue and Dawei to turn over. But the entire day passed without such recovery, and no substantial rebound occurred. Tomorrow, Kanyue Technology is likely to open at limit down. After turnover, it could be the last potential recovery point for the sector. If tomorrow’s recovery is weak or absent, the sector’s outlook will be limited, and the wave may end. However, given the large decline and loss effects already released, even if there is further adjustment tomorrow, it probably won’t be as extreme as today. Only a strong recovery tomorrow can preserve sector expectations. But considering holiday factors and news impact, the post-holiday trend will still be heavily influenced by holiday news. If you want to avoid risks, even if there is a recovery tomorrow, you can choose not to participate.

5. Glass Fibers and Fiberglass

Since the low point, the core sectors—macro and tech, China National Building Material, and International Composites UM—have gained 30-40%. After several days of continuous rise, profit-taking has increased, and it’s advisable to gradually reduce positions and wait for the next correction. For off-market funds, there are no entry points left; just watch for now.

6. Commercial Aerospace

The sector continues to fluctuate. As a mid-term sector with difficult-to-falsify logic, if funds flow back after the holiday, aerospace stocks still have a good chance to perform. The recent stabilization of Aerospace Development, which had been declining, is a positive sign. Additionally, the no-issue of the nuclear button by Jili Sui did not cause significant negative feedback, which is also good. Tomorrow is expected to be a benign oscillation, with focus on volume-driven bullish signals. A single volume surge could trigger continued explosive expectations. Until then, it’s better to consider only left-side trading opportunities.

Overall, due to uncertainties from holiday news, the index, sentiment, and sector rhythm before and after the holiday are disconnected, making it impossible to follow normal logical projections of phased trends. All projections are only valid for tomorrow. After the close, we will not post new updates and will wait until the day before the market opens to give a detailed review based on holiday news.

Tomorrow is the last day before the New Year. I’d like to take this opportunity to wish all supporters of Lao Mao a Happy New Year in advance. During the holiday, feel free to visit the posts and chat.

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