3.25 Power continues to strengthen, Liaoning Energy and Huaneng Energy continue to hold their shares; when will tomorrow's trend index bottom out, and what should we do next?

Looking back on most of this month, the aggressive profit-taking was insane. For short-term traders, it was a nightmare. Many investors also issued “surrender letters.” After Huadian Liaoning Power broke out, it gave short-term hope and led the electricity sector to a rally.

Last Wednesday, we entered Liaoning Power and Huadian Energy with my partners, and the gains were substantial. Today, I wanted to take a passive short position, but I was quickly sold out. So I’ll wait until the trend ends to respond.

The impact of external black swan events caused the index to fall into two large downward candles last Friday. These two days, it has partially recovered, though many stocks still got caught in a trap—some got sold off, others only pulled back slightly. Fortunately, this provided an opportunity to cut losses. Moving forward, the market should enter a rotation phase; stocks that haven’t filled their gaps will catch up. The index is likely to oscillate around the current level, testing support and forming a bottom.

After forming a bottom, what’s next? It’s time for swing trading. Previously, trend stocks disrupted by black swan events—such as the previously discussed government computing power leasing and internet services—can now be bought low and sold high as growth narratives resume. Today’s “keywords” are mostly domestic computing power sectors: Halo, Aoruite. We’ll see the feedback tomorrow.

The current main theme is electricity. When will it end? It depends on a few leaders like Liaoning Power, Yunnan Power, and Hangzhou Electric. If these diverge and move separately, the electricity sector can continue to be traded. Like the early days of commercial aerospace, if they all accelerate together or all give negative feedback, the trend will end. Yunnan Power led the decline today, hitting Liaoning Power, but Hangzhou Electric hit the daily limit up. Tomorrow, if Yunnan Power shows a double-top pattern, watch out for negative feedback it might bring. The key is to monitor Liaoning Power’s last line of defense.