3.12 Core Strategy 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, cut losses when breaking support, enter and exit 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 on the “core”?

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 continuous catalysts.
Pay attention to sectors with ≥3 stocks hitting the daily limit, and 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 consecutive limit-ups).
Trend Dragon: The solid stocks in the sector that steadily rise 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 that sector.

Buy on divergence, sell on consensus:

Buy point: When the core leader first shows healthy divergence (e.g., rapid pullback after opening, then quickly recovers the moving average, or after a breakout, quickly re-encapsulate).
Sell point: When the core leader accelerates and consensus turns bullish (e.g., first large volume after a continuous limit-up, or a huge volume at a high level showing stagnation).
Cut loss immediately if the stock breaks support: For stocks with consecutive limit-ups, if they fail to hit the limit the same day (break support), exit immediately the next day without fantasies.

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

Proactive blocking: Only keep core targets in your watchlist, do not look at stocks on the last pages of the gain list.
Reject temptation: When miscellaneous stocks suddenly surge, ask yourself: “Is it the leader? If not, why is it rising?” (Answer: Usually to unload).
Position constraints: 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 reflection: If losses that day 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 brightest is. “Core” stocks enjoy liquidity and sentiment premiums, while “miscellaneous” stocks bear liquidity discounts and selling pressure fears. Your task is not to find undervalued stocks but to dance with the market’s strongest funds in full view, and leave first before the music changes.

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

There are only a few stock choices each day; memorizing buy points isn’t hard. Otherwise, you can copy them during trading, buy when strategy signals appear, and stay out when it doesn’t. This is much more efficient than most people busying themselves with random trades daily.

Today’s holdings: Green Power Electric

Yesterday’s strategy:

1. Wangli Security’s three-limit stocks were mentioned yesterday; participation is forbidden, PASS

2. Tianfu Communications and Zhongji Xuchuang are trend stocks; use intraday or moving average support for low buy and high sell. I mainly focus on consecutive limit-up relay trades; analyze trend stocks but do not participate. Interested parties can trade based on conditions, PASS

3. Green Power Electric’s turnover and hitting the limit are in line with strategy; Zhongdian Xinlong did not reach the limit, and the strategy clearly states to avoid low buying and chasing highs, only do confirmed limit-up trades.

4. Ningbo Construction is actually relatively strong today, mainly because the computing power sector is weak, so I mentioned during the day that I won’t chase the limit if it re-encapsulates. The sector is weak, but this stock might turn stronger tomorrow, as the funds hitting the limit are quite strong today.

Tomorrow’s strategy:

Market analysis for March 10

Today, driven by new energy and chemical sectors, the three major indices all closed higher, with the ChiNext leading at +1.31%. However, the market shows a typical “index up, individual stocks down” split pattern, with over 3,200 stocks declining, and profit opportunities concentrated in a few sectors. The total turnover was 2.51 trillion yuan, slightly higher than yesterday, with clear signs of internal capital reallocation.

Short-term sentiment divergence from index performance is severe, with high-risk stocks releasing risk at high levels, and sentiment still in a “retreat” phase:

Space sector performance: Yesterday’s 5-limit Wangli Security opened high and fell sharply, closing down 4.69%, with nearly 20% daily range, turnover of 859 million, and net outflow of 285 million, continuing to suppress short-term sentiment.

Relay stocks: Total 10 stocks with consecutive limit-ups, an increase from yesterday. Ningbo Construction advanced to 4 consecutive limit-ups, Zhongnan Culture hit 3 consecutive one-word limit-ups. Yesterday, only 2 of 6 limit-up stocks advanced, with a 33.33% upgrade rate.

Sentiment core data: 67 stocks hit the limit-up, 2 hit the limit-down, with a reasonable break rate. But high-level stocks show significant loss effects, with other strong stocks like computing power and power grid sectors also pulling back.

Sentiment cycle positioning: The index rebounded under the influence of new energy and other heavyweights, but the ecological relay is extremely harsh in the short term. The market’s high-level limit-up stocks are breaking support, funds are withdrawing from high-level relay stocks, shifting to trend sectors (new energy, chemical) and low-level first limit-ups. It’s a “index repair” coexisting with “relay sentiment retreat” — a mixed picture.

① Sector hot spots analysis:

Funds are flowing out of yesterday’s strong tech sectors into sectors with more certain performance and policy expectations, forming a clear primary-secondary structure:

Strongest main line: New energy sector (batteries, PV equipment)

Drivers: AI computing demand boosts green electricity expectations, CATL’s better-than-expected earnings boost industry confidence, and the “14th Five-Year Plan” clarifies carbon reduction goals.

Performance: Sector index surged, with stocks like Xineng (20CM), Deyue, Chint Power, and Energy Saving Wind Power hitting the limit. This is the core driver of today’s index rise, led by institutional and trend funds.

Sector evaluation: Logical and large capacity, but peaked today; caution against chasing high tomorrow.

Intra-day breakout main line: Chemical sector (PVC, titanium dioxide, coal chemical)

Drivers: International LNG supply disruptions (Qatar plant shutdown) trigger price hikes; some chemical products (Huafeng Superfiber, Red Wall) announced price increases.

Performance: Explosive in the afternoon, with stocks like Zhongtai Chemical, Xinjiang Tianye, Jinniu Chemical, Baofeng Energy hitting the limit. A rebound driven by event catalysts, with sustainability to be observed.

Sector evaluation: Clear event-driven catalyst, but cyclical in nature; monitor commodity prices.

Trend continuation main line: CPO/Optical Communications (computing hardware)

Drivers: Nvidia GTC conference approaching; US AOI companies receiving over $200 million orders for 1.6T optical modules; AI applications like OpenClaw boosting computing demand.

Performance: Sector shows differentiation. Riescanda hit 2 consecutive limit-ups, but core trend stocks like Tianfu Communications and Zhongji Xuchuang perform flat; Longfei Optical Fiber surged then pulled back, closing up 7.25%, not hitting the limit. The trend extends from optical modules to upstream materials but is weaker than yesterday.

Sector evaluation: Industry trend is clear, but internal rotation suggests low-entry points for trend-following rather than relay trading.

Differentiation main line: Computing power — power grid synergy (computing-electrical synergy)

Performance: Sector shows differentiation, with high-low switching. High-level stocks like Jinpan Technology and China Western Electric adjust; low-level stocks like Green Power Electric hit 2 consecutive limit-ups, China Energy Construction hit 2 limit-ups in 4 days. Indicates funds are switching between high and low levels within the sector.

Sector evaluation: Policy logic exists, but wait for a new sentiment cycle.

Leading down sectors: Small metals, military industry, semiconductors, AI applications

Reasons: Funds are flowing out of high-level tech and thematic stocks into new energy and chemical sectors.

② Core buy/sell strategies (March 12):

Total position principle: As high-level stocks retreat and risk is released, operate by “avoiding high and seeking low,” strictly avoid high-level relay stocks, focus on opportunities in low-level new themes or sharp declines in main trend stocks.

1. Market leader observation: Wangli Security (605268) — a tide indicator

Status: After 6 limit-ups, today opened high and closed with a large bearish candle, with increased volume and significant net outflow, confirming retreat.

Tomorrow’s strategy:

Holdings: If there’s a rebound tomorrow, it’s the last chance to exit; cut losses decisively.

Cash holders: Absolutely avoid participation. This stock has become a negative feedback anchor for market sentiment, and its movement will influence high-level stocks.

2. New cycle trial (two directions)

3. Market leader observation: Wangli Security (605268) — a tide indicator

Status: After 5 limit-ups, today opened high and closed with a large bearish candle, with increased volume, confirming retreat.

Tomorrow’s strategy:

Holdings: If there’s a rebound tomorrow, it’s the last chance to exit; cut losses decisively.

Cash holders: Absolutely avoid participation. This stock has become a negative feedback anchor for market sentiment, and its movement will influence high-level stocks.

2. New cycle trial (two directions)

Direction 1: Chemical sector “one-in-two” (event-driven arbitrage)

Targets: Baofeng Energy (600989), Zhongtai Chemical (002092).

Logic: Today’s first breakout in the sector, with multiple first-limit stocks. Tomorrow, use “one-in-two” to filter strength. Both are core stocks benefiting from price hikes and earnings catalysts.

Buy/sell points:

Buy point (only): After turnover, strong upward limit-up. Must meet: ① high open (3%-7%) with no core button; ② sufficient turnover in early trading; ③ actively attack and hit limit before 10:30 to buy in.

Risk control: If the sector weakens at open or targets drop sharply without support, abandon.

Direction 2: New energy trend core stocks low buy (institutional trend)

Targets: Sunshine Power (300274), CATL (300750).

Logic: Industry trend core, big funds battlefield. Under the background of difficulty in reaching relay heights, trend style may be more favored.

Buy/sell points:

Buy point: When the sector experiences healthy divergence due to overall market adjustment or profit-taking, and core stocks pull back to 5-day or 10-day moving averages with intraday stabilization, can lightly low buy.

Sell point: If sector leaders like Xineng or Deyue fall sharply or hit the limit down, trend logic is broken, and stop-loss is needed.

3. Relay stock game: Ningbo Construction (601789)

Status: A space sector stock (4-limit-up), but in the “mid-phase” of “sentiment retreat.” Its movement is key to judging whether sentiment can recover, but it has low value and high risk.

Specific conditions (must all be met):

Pre-market: Opening price cannot be a “core button.” Best if flat open (±1%) or slight low open (within -3%). If large gap down (-5% or more) or high open (+5% or more), abandon.

Intraday: Within 30 minutes after open, stock must quickly and decisively rise with volume, with a steep intraday line, showing strong support and bullish intent. Cannot be slow oscillation or pullback.

Limit-up: Must close at limit before 10:30 with large orders sweeping to lock the limit, with firm support, no repeated breakouts.

Sentiment environment: At the same time, Wangli Security must not hit the limit down, and the number of limit-down stocks should not increase significantly. Preferably, stocks from infrastructure, data centers, or “computing-electrical” sectors support.

Buy method: Only for limit-up chasing. When confirming a strong limit-up and stable orders, queue at the limit price to buy. Absolutely no low buying or chasing mid-rally.

Position holders (already bought today):

If opening is worse than expected: If tomorrow’s opening price drops sharply (-5% or more) or quickly falls without support, cut immediately, no illusions.

If it peaks and then falls back: If intraday peaks but cannot hit the limit, and the intraday chart shows a clear downturn, sell decisively.