3.5 Core Strategies for Tomorrow's Market

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The essence of short-term trading is “leveraging trends to make quick money”—using hot topics, capital synergy, and trend inertia.

You must adhere to three iron rules:

Only trade strong stocks, avoid weak ones;
Go long online, observe offline, exit if breaking support, buy and sell quickly;
Focus on core stocks, stay away from miscellaneous ones.

1. What is the core, and what are the miscellaneous stocks?

2. How to identify and operate “core” stocks?

Step 1: Identify the strongest sector of the day

After 30 minutes of opening, check the “Sector Gain List” on Tonghuashun or Eastmoney.
Exclude one-day speculative themes, choose sectors with policies, events, and logical catalysts.
Pay attention to sectors with ≥3 stocks hitting the daily limit, with a complete ladder (first limit, second limit).

Step 2: Find the core within the strongest sector

Space Dragon: The stock with the highest number of consecutive limit-ups within the sector (e.g., 5 consecutive limit-ups).
Popularity Dragon: The stock with the highest trading volume and discussion within the sector (not necessarily the most limit-ups).
Trend Dragon: The large-cap stocks steadily rising along the 5-day/10-day moving averages.

Step 3: Execute the ultimate discipline of “focusing on the core”

Buy only the first place: If conditions permit, only buy the top stock in the sector. If you dare not buy the leader, better not trade in this sector.

Buy on divergence, sell on consensus:

Buy point: When the core leader first shows healthy divergence (e.g., rapid rebound after sharp sell-off at open, quick recovery after breaking support).
Sell point: When the core leader accelerates and consensus turns bullish (e.g., first large volume after a continuous limit-up, or massive volume at a high level showing stagnation).
Cut loss immediately if the stock breaks support: For limit-up leaders, if they fail to hit the limit the same day (break support), exit immediately the next day without hope.

3. How to thoroughly “stay away from miscellaneous stocks”?

Proactively block: Only keep core targets in your watchlist, do not look at stocks on the last pages of the gain list.
Resist temptation: When miscellaneous stocks suddenly surge, ask yourself: “Is this the leader? If not, why is it rising?” (Usually: to unload).
Position constraint: Even if trying a tiny position to test miscellaneous stocks, strictly limit single-stock position to no more than 2% of total capital, to prevent large losses.
Review and reflect: If losses come from miscellaneous stocks, record it in your trading log, reinforce the “miscellaneous = loss” muscle memory.

Core philosophy

In short-term markets, capital and attention are scarce resources, always gathering where the spotlight is brightest. “Core” stocks enjoy liquidity and sentiment premiums, while “miscellaneous” stocks bear liquidity discounts and selling pressure. Your task is not to find undervalued stocks but to dance with the market’s strongest funds and leave first before the tune changes.

Remember: In short-term trading, every act of sympathy or luck towards miscellaneous stocks is a betrayal of your capital. The biggest profits come from the core, and the biggest losses often stem from refusing to cut losses on miscellaneous stocks.

Yesterday’s post with 7 support tickets became a featured article, so I will add more market analysis. From now on, as long as the post is a featured article, I will add analysis. Mutual effort leads to mutual achievement.

Today’s holdings: Yunnan Energy Holdings, Shandong Molong

Yesterday’s strategy:

1. The oil sector opened below expectations, but Yunnan Energy Holdings opened above expectations and was red at the start, which was the best opening. Coupled with rotation expectations, the opening or pre-market is a cost-effective buy point.

2. Priority of oil sector at open: Intercontinental Oil & Gas > Shandong Molong, Zhunyou Co. > Tongyuan Petroleum, Heshun Petroleum, Zhongman Petroleum > others.

When the top priorities like Zhunyou Co. can be bought freely, arbitrage is simply to buy at the open or exit immediately, so Heshun Petroleum, Tongyuan Petroleum, Zhongman Petroleum were sold at the open.
Intercontinental Oil & Gas still shows a large single limit-up, so the decisive re-accumulation and re-closure of Zhunyou Co. and Shandong Molong are key. Shandong Molong fully meets the strategy.

3. Shufa Gas opening with a single limit-up has no cost advantage; previously, Jinjingda and Chengxing Co. explained this principle many times—PASS.

4. Tongyuan Petroleum does not meet the strategy—PASS.

Tomorrow’s strategy:

1. Market review on March 4

Index and volume: Shanghai Composite down 0.98% at 4082.47; Shenzhen Component down 0.75% at 13917.75; ChiNext down 1.41% at 3164.37. Total market turnover shrank significantly to about 2.37 trillion yuan, down about 760 billion from the previous day.

Sector performance: Clear structural differentiation.

Leading sectors: Power grid equipment / Ultra-high voltage (Aikang Zhidian, Shun Na Co., Jicheng Electronics, etc., multiple limit-ups), military equipment, grain/agriculture (Yasheng Group 4-limit-up), storage chips (Buwei Storage, Demingli limit-up), etc., defying the trend.

Laggard sectors: Gas, port shipping, precious metals, coal mining, and other cyclical sectors with large gains previously, now sharply retreating.

Limit-up ladder and market sentiment:

Top limit-ups: Yasheng Group and Water发 Gas both upgraded to 4-limit-ups, becoming benchmarks for market limit-up height.

Oil & gas divergence: Intercontinental Oil & Gas (7 days 5 limit-ups), Shandong Molong (3 limit-ups), and other core stocks still hitting the limit, but many follow-on stocks are retreating.

Number of limit-down stocks: 21, significantly fewer than 82 the previous day, indicating easing market panic.

Northbound funds: Net outflow of 3.72 billion yuan today.

2. Market core analysis today

Market sentiment: Recovery and trial-and-error in the tide retreat phase

Overall, the market is in a sentiment retreat, but panic has eased compared to yesterday. After funds flowed out from high levels, they attempted to attack new directions like power grid equipment, agriculture, storage chips, driven by policies or performance catalysts. This is a high-low switch and trial-and-error in the tide retreat phase; the sustainability of new directions remains to be seen.

Main sector analysis: Old and new alternation, mainly defensive

Old main line (oil & gas industry chain): Entering a phase of strong divergence. Although leaders like Intercontinental Oil & Gas and Shandong Molong still hit the limit, internal differentiation is intense, with many follow-on stocks plunging. This indicates the oil & gas rally has shifted from broad gains to a leader battle, increasing trading difficulty.

New main line (power grid equipment / ultra-high voltage): Today’s strongest trend, driven by “US power grid expansion plan” and domestic “new infrastructure” policy expectations. Many stocks hit the limit, with complete ladders, becoming the main direction for capital switching. Its sustainability depends on the strength of the leader Shenma Power (3 limit-ups in 5 days) tomorrow and whether new limit-ups appear.

Defensive sectors (agriculture, military): Traditional safe havens, favored by funds amid geopolitical and food security concerns. However, more transitional themes, difficult to sustain leadership.

Oversold rebound (storage chips): Buwei Storage, Demingli, etc., hit the limit-up due to earnings pre-increases exceeding expectations, but overall sector strength needs observation.

Market sentiment leaders (determine risk appetite):

Space sector representatives: Water发 Gas (4-limit-up) and Yasheng Group (4-limit-up) are benchmarks for limit-up height. Their movements determine short-term speculative sentiment strength.

Sector focal points:

Intercontinental Oil & Gas (7 days 5 limit-ups): As the core of the oil & gas main line, its trend directly affects the entire cyclical sector and market risk appetite.

Shenma Power (5 days 3 limit-ups): As a new hotspot in power grid equipment, its strength determines whether the new direction can continue. It’s key to observing whether funds are willing to open new battlefields.

High-level sentiment benchmark: Yunnan Energy Holdings (10 days 8 limit-ups). After touching the limit, it broke the board but closed up 7.38%. It has shifted from “the absolute leader driving the market-wide rally” to “the core benchmark of high-level sentiment,” serving as a thermometer for whether the market’s risk appetite at high levels can recover.

3. Tomorrow’s (March 5) buy and sell strategies

Core idea: Defensive counterattack, focus on new main line trial-and-error, strictly control positions, buy and sell quickly.

Step 1: Opening stance (9:25-9:35)

Sentiment observation: Watch Water发 Gas and Yasheng Group at open. If they hit the limit or open deep, market sentiment is poor, and no positions should be held.

Main line observation:

Oil & gas: Check if Intercontinental Oil & Gas or Shandong Molong hit the limit or open significantly lower. If yes, confirm the old main line is retreating; avoid.

Power grid equipment: Check if Shenma Power and Shun Na Co. open strongly. If yes, the new main line may continue.

Risk observation: Are limit-down stocks increasing rapidly (more than 5 within 10 minutes of open)? If yes, market risk is high, and it’s best to stay out.

Step 2: Detailed buy and sell strategies for core targets

(a) Market sentiment leaders (observe signals, decide risk appetite)

Water发 Gas (603318) / Yasheng Group (600108) - 4-limit-up:

Scenario A (continue to advance): Open high and hit the limit quickly, with strong order book. Strategy: Hold if you already have positions, but do not add. If you are not in, observe as a market sentiment indicator.

Scenario B (mild break): Open high, fluctuate, close up but not limit, with good intraday support. Strategy: If no limit-down, try small positions for the first limit-up.

Scenario C (limit-down): Open directly at limit-down. Strategy: Clear signal of sentiment hitting bottom; must exit all positions immediately, stop buying.

(b) New main line focal point (power grid, small positions for trial)

Shenma Power (603530) - 3 limit-ups in 5 days:

Buy point: Only consider divergence and turnover. Conditions:
① No batch limit-down in sector;
② Open high (+3% to +5%) with strong support, then before 10:30, strong rebound to limit-up.

Strategy: Only buy on limit-up rebound with stable order book (>20,000 lots).

Stop loss: Buy on limit-up, if next day not limit-up, sell unconditionally.

Shun Na Co. (000533) - core on first limit-up:

Buy point: Only consider weakening to strengthening. Conditions:
① Shenma Power hits limit-up strongly;
② Open slightly high, then quickly rise, hitting limit-up before 10:00.

Strategy: Only buy on limit-up.

Stop loss: Same as above, sell if not limit-up next day.

© Old main line (oil & gas, sell only)

Intercontinental Oil & Gas (600759) - 5 limit-ups in 7 days:

Strategy: Sell only. Watch opening closely; if opening below expectations (big gap down or quick drop to green), take profit decisively. Do not chase high.

(d) High-level sentiment indicator (not for trading, just observation)

Yunnan Energy Holdings (001896) - 8 limit-ups in 10 days:

Strategy: Use as sentiment indicator. The only buy point is a strong rebound limit-up (high open, rapid limit-up, strong order book). Small position only. Otherwise, do not participate. Its trend is an important reference for high-level risk appetite.

Your support is mutual; your encouragement motivates my writing. I hope we can continue to learn from each other in the days ahead!

Yesterday’s post finally gained recognition as a featured article. I will keep providing strategic analysis to earn your continued support.

Thanks to the 8 friends @jxguo @TashanYu @BiaoChangZhu @BingShanXuJi @XinZhiSuoXiang1 @ErShouDaoShi @JiaBeiChaoGu @JingNiuLiJi for their tips, and the 7 friends @TaoguLiRi @LongTouXinYangZhiMing @ChaoYuQiLongTouXuanShou @ErChangGong @ShiKongYiShu @Shmily96 @BingShanXuJi for their support.