3.25 Review: Huadian Liaoning Energy 8-Board Power Second Wave Acceleration, Henan Energy End-of-Day Dive - Beware of Topping

Index rebounds again, bottom confirmed! The power sector remains strong, with China Power LiaoNeng making a bold move to hit 8 limit-ups! However, the late-day plunge of Yunnan Energy Holdings signals caution for tomorrow’s market divergence. The structural trend remains unchanged; rhythm and rotation are key. [Taogu Ba]

Following the Trend
The three major indices opened high and continued to rise, maintaining the rebound. Compared to yesterday’s rollercoaster, today’s rebound is much more solid. The Shanghai Composite and the All A-Share Index both effectively recaptured the half-year moving average, further confirming the bottom. The total daily volume was 2,179.8 billion yuan, up slightly by 97 billion. The gap and box pattern above the index will be the main resistance going forward. Breaking through in one go remains unrealistic, especially after two consecutive days of large gains, as some digestion is needed. Continued consolidation and oscillation are likely, and if a pullback can be sustained, the bottom will be more solid.

The main theme remains the power sector, which continues to lead. Yesterday, optical communications resonated with the index, and today they continued to move in sync, showing some rebound strength.
Throughout the day, 23 power stocks hit the daily limit, with a total increase of 25.301 billion yuan. China Power LiaoNeng led with an 8-limit-up move amid unusual activity. China Power Energy, with 7 limit-ups in 12 days, shows a strong trend. ShaoNeng Shares hit 5 limit-ups in 6 days, Guangdong Power 4 in 6 days, with two stocks hitting 3 limit-ups and four hitting 2, others just opening their first limit-up. The power concept index has surged for two days straight, reaching new highs today, with the second wave accelerating faster and more fiercely. However, the late-day plunge of Yunnan Energy Holdings signals some divergence.

Optical communication stocks hit 13 limit-ups today, with a total increase of 25.503 billion yuan. Changfei Fiber and Tongding Interconnection each hit 2 limit-ups, with 11 stocks opening at the limit. Although the concept index also rose for two consecutive days, the downward trend remains, with no significant increase in volume, mainly a rotation rebound.
Computing power stocks also performed today, with 9 limit-ups totaling 5.332 billion yuan. Aorui De and Zhen Shi Tong each hit 2 limit-ups, with 7 stocks opening at the limit, but overall cohesion is weak.
Other sectors saw 8 limit-ups in consumer goods, 5 in hardware, and some activity in Fujian stocks late in the session, though no clear sector effect emerged.

Market Sentiment Fluctuations
The rebound continues, and market sentiment is warming. Over 4,600 stocks closed higher today, with around 500 declining. The market opened high and moved higher throughout the day, showing strength and smoothness, leaving the previous lows behind.
On the speculative side, tolerance for risk has increased. Today’s feedback was positive, with China Power LiaoNeng actively hitting the limit-up, further opening short-term space. The previously negative feedback on Chint Power also recovered to close higher.
Some signals are worth noting: one is the late-day plunge of Yunnan Energy Holdings, and another is that strength is mostly concentrated at low levels. This was evident from the overnight orders, where Xineng Taishan and Liaoning Energy had large buy orders, especially during the session. Yesterday, the active Jin Kai was relatively weak.

Tomorrow’s Outlook
Yesterday, I considered the market’s rebound strength to be moderate, mainly focusing on the power sector and groupings. Today, after the continuous rebound, the bottom is basically confirmed, so further large declines are less of a concern.
Next, it’s important to consider the rhythm among themes. After the power sector’s consistent performance, some divergence is expected. The key question is whether the淘汰赛 (淘汰赛) will be too intense. Since the trend remains good, focus should be on one high and one low—avoiding the middle. The high represents core groupings, and the low indicates rebound plays, which already show signs today.
Then, observe which sectors emerge during the power sector’s adjustment and digestion phase to absorb liquidity and rotate. Currently, optical communications have a clear advantage. However, as mentioned earlier, the trend of themes has not yet fully recovered. If volume can further increase and recapture the moving averages, consensus will strengthen. Until then, the market will continue to rotate, mainly focusing on leading stocks.
It’s unlikely that the broad rally will persist indefinitely, so groupings will probably continue. Tomorrow, watch whether Yunnan Energy’s prelude today causes some high-flyers to weaken further. If high-flyers show negative feedback again, it could signal a top in the theme.
In summary, the two-day rebound has not changed the overall weak trend of the index. The structural themes remain, and rhythm shifts should be closely monitored.

Trading Tips
Today, I did not participate in optical communications; only sold holdings, no new entries.
After the open, I first sold Jin Kai and Ruis, and exited Yunnan Energy at the high point around 10 am.
Only China Power LiaoNeng continued to rise strongly and was held.

Post-market holdings: 1 China Power LiaoNeng.

Data Summary

☑ Disclaimer: The above is solely my personal review notes. Any opinions or stocks mentioned are for illustration only and do not constitute investment advice. Please avoid blindly following. Trading involves risks; invest cautiously!
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