[Red Envelope] The new cycle begins next week!

Foreword [Taoguba]

The threshold for trading is in technique, but the ceiling is in mindset.

In the same market conditions, some stay calm and strategize, while others panic and escape; some follow signals firmly, while others hesitate repeatedly. The gap has never been in cognition but in self-control at the moment of trading.

After experiencing wind and rain, we realize that top-tier trading is about external market trends and internal self-cultivation. Follow the trend without going against it, maintain discipline instead of acting impulsively, understand when to take profits and cut losses, and avoid greed. It’s not about always buying at the lowest point and selling at the highest, but about ensuring every operation aligns with your system and inner conviction.

Experts are never emotionless; they simply are not controlled by emotions. When cognition translates into action, and discipline becomes instinct, trading ceases to be a nerve-wracking gamble and becomes a steady stream of compound growth. This is the simplest truth of navigating bull and bear markets.

1. Trading Review:

2. Huasheng Tiancheng: Sold part of the position during today’s trading, remaining position intact.

2. Runze Technology: Exited today, missed some gains in the remaining position.

3. Yasheng Group: Bought in around -2% during Wednesday’s dip, anticipating a rebound the next day. As expected, it surged on Wednesday, halved the position after hitting the limit, and kept the rest. Successfully upgraded to the second board on Wednesday. Due to solid profits and trend-like movement, it showed strong support throughout the day and maintained the position.

4. Kelik, Zhongheng Electric: Kelik sold half in the morning, kept the other half. Zhongheng was weak all day and exited at the close.

5. Tenglong Shares: Participated during the bidding, with about 6% unrealized profit. Will exit at the intraday high tomorrow.

2. Market Analysis:

(1) Index Understanding: The market bottomed out and rebounded, with the major indices narrowing their declines after the afternoon. The combined trading volume of Shanghai and Shenzhen was 2.44 trillion yuan, shrinking by 66.5 billion compared to the previous trading day.

(2) Continuous Limit Tier: The overall sentiment for consecutive limit-ups remains weak. Yunnan Energy’s breakthrough beyond 7 limit-ups was constrained, making it the first to break the ice after the holiday. Overall, Yunnan Energy’s recent performance has been better than expected, with funds attempting to guide new groupings, but short-term market sentiment is still poor, and during the meeting period, regulators have not relaxed their strict controls. Therefore, expectations for sustained patterns should be lowered, mainly focusing on arbitrage. Today, Yunnan Energy remained strong before closing, with clear fund support. Next week marks a new cycle start. Be patient these days and control your hands.

3. Sector Analysis:

(1) Green Electricity (Leading Sector)

Core Stocks:

• 3-day limit: Green Power, Huadian Energy
• Limit-up: Xiexin Energy Science, Datang Power, Jinkai New Energy, Energy-saving Wind Power, Green Power etc.

Catalytic Logic:

• Strong policy support: The 2026 government work report first proposed calculating electricity with new infrastructure, requiring data centers to have over 80% green electricity, building a new power system.
• Demand surge: AI computing power consumption skyrockets, green electricity becomes a necessity for data centers, opening up absorption space.
• Fundamental turning point: Capacity and electricity price mechanism implemented, raising electricity prices by 0.04-0.05 yuan per kWh, restoring sector profitability.
• Capital inflow: Sector heavily oversold and undervalued, ETF net inflows for four consecutive days, reaching new highs.

(2) Chemicals (Continued Strength)

Core Stocks:

• 5 limit-ups in 9 days: Jinniu Chemical
• Limit-up: Luxin Technology, Sanfangxiang, Hebang Biological, Baichuan Shares, Ando Mai A, among others.

Catalytic Logic:

• Futures + spot resonance: PTA, PX, short fiber futures hit limit-up, and the price rise in chemicals is transmitting to the stock market.
• Geopolitical + cost factors: Middle East conflicts push oil prices higher, and coal chemical routes gain cost advantages.
• Supply-demand improvement: Capacity regulation + European capacity exit, “anti-involution” + peak season replenishment, profit estimates raised.
• Fund grouping: Leading net inflows, becoming a market risk-avoidance main line.

(3) Coal (Energy Substitution)

Core Stocks:

• Limit-up: Yankuang Energy, Zhengzhou Coal & Electricity, Shaanxi Black Cat
• New highs: China Coal Energy hits 2018 high.

Catalytic Logic:

• Energy substitution: Oil prices surge, power generation and industry shift to low-cost coal, estimating an annual increase of 84.86 million tons of thermal coal globally.
• Supply contraction: Indonesia reduces export quotas, import coal tight, domestic inventories low, supply and demand are tight.
• Policy + defense: Capacity management + high dividends, preferred for risk aversion.

(4) Carbon Fiber (Technological Breakthrough)

Core Stocks:

• 20cm limit-up: Zhongfu Shenyan (world’s first T1200 grade launch)
• Limit-up: Jilin Chemical Fiber

Catalytic Logic:

• Technological breakthrough: China’s first T1200 ultra-high-strength carbon fiber launched globally, with mass production of hundreds of tons, breaking the monopoly.
• Application explosion: Commercial aerospace, low-altitude economy, humanoid robots lightweight needs, satellite weight reduction saves $20,000 per launch per kg.
• Domestic substitution: High-end materials autonomous control, industry chain prosperity increases.

(5) Gas Turbines (Continuous Adjustment)

Core Stocks:

• Sharp decline: Boyingte Welding, Hailianxun

Catalytic Logic:

• Sector previously surged, profit-taking by funds;
• Shift of energy main line to coal and green electricity, gas turbines lose support;
• No new catalysts, sentiment weakens.

(6) Military Industry (Weakening)

Core Stocks:

• Decline: Hangya Technology, Hangyu Technology, Hangfa Power, China Satellite Communications

Catalytic Logic:

• Funds shift: Capital flows out of high-valuation military stocks into low-valuation defense sectors like coal and chemicals.
• Sentiment suppression: Reduced volume + decreased risk appetite, high-level themes all cash out.
• No strong catalysts: No major orders or policies in the short term, sector under pressure.

4. Tomorrow’s Opportunities:

(1) First limit-up to second limit-up: Delong Huineng + Jiangsu New Energy;

(2) Continuous limit-up tracking: None at the moment;

(3) Rebound pattern: Lirong Electronics;

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