3.26 Find Direction!

Huadian Liaoning Power (sh600396) Brief Note: As mentioned in previous articles, after breaking below 4,000 points, the more the left side declines, the more opportunities appear. The recent two-day rebound in the index fully confirms this judgment. Now, the market is beginning to recover. I wrote about this on Wednesday; it resembles the market pattern after the U.S.-Russia conflict in early April last year, so choosing the right direction is crucial. From the current point in time, I can clarify for everyone: since the beginning of the year, whether it’s aerospace, AI applications, Seedance, or AI computing power, none have really gained traction. Here, I mainly refer to the high-level trend; the trend is still there. What has truly gained momentum is the energy collaboration represented by Huadian Liaoning Power, which can also be seen as a symbol of a strong energy nation, as it includes concepts like hydrogen energy and photovoltaics.

Thinking along the current market’s only eight consecutive limit-up stock, Huadian Liaoning Power, there are two options: either participate in the limit-up relay, since the 8-limit-up has already surpassed Yunnan Energy Control’s 7-limit-up, marking a breakthrough in height; or follow the broader trend of building a strong energy nation. This is the idea. The so-called energy nation includes green electricity, energy storage, hydrogen energy, and offshore photovoltaic projects. Green electricity and offshore PV began a large-scale hype in March, while energy storage and hydrogen energy are still relatively less developed, so they deserve more attention. Next, I will analyze the index levels and sentiment cycles:

1. Index Cycle Thinking:

After bottoming out on Monday, the index rebounded sharply on Tuesday and Wednesday, with increasing volume, indicating active capital inflow from outside the market. However, there is a gap above, and this rebound was also triggered by easing US-Iran tensions. But negotiations under easing conditions may not be quick or straightforward. I don’t rule out the possibility that the index might start to fall back after reaching the gap level. Therefore, whether the gap will be effectively filled first, and whether the market will move in a one-sided recovery or range-bound oscillation, I personally think the probability of a one-sided upward repair is low, and a range-bound oscillation is more likely. That’s my view on the index cycle.

2. Sentiment Cycle Projection:

First, Dragon Analysis: In March, the clear leader was Huadian Liaoning Power, which is also the strongest leader so far in 2026. It has low prices, authentic concepts, and continuous limit-ups with turnover. But currently, it’s quite high, so I view it mainly as a sentiment indicator; be careful not to chase high. From Huadian Liaoning Power’s success, we can see some market preferences this year: first, sectors aligned with policies, such as energy collaboration; second, low-priced small-cap stocks, which have retail investor bases and are easier to rally, especially since liquidity pressure exists near 4,000 points; third, sector effects—green electricity has not been heavily promoted in the past five years, which is also a criterion for stock selection.

Finally, a risk warning: the entire energy and power sector, including the calculation electricity concept, is linked to Huadian Liaoning Power. As Huadian accelerates, divergence expectations will emerge, and when Huadian faces divergence, it could suppress the entire sector—like the sharp drop in the back rows on Wednesday afternoon. In the coming days, this could evolve into a real major divergence or even a tide retreat.

Second: Opportunity Analysis: The market operation direction aligns with previous judgments—either power and technology or oversold military industries. As mentioned earlier, the index’s rebound funds will choose directions: either the main line, which includes power and computing power. Power relates to energy substitution, green power generation companies; computing power involves token exports, recently defined as “word vector technology,” with some AI hardware companies related to it. The sectors that have fallen the most in the short term are related to commercial aerospace military industries, which have become market hotspots in recent days. Moving forward, April is approaching. Power stocks, especially Huadian Liaoning Power and other power companies, are likely to experience a collective correction. Only after this correction can the market truly bottom out. During this correction, funds will shift from pure concept stocks in energy to those with actual performance, such as energy storage and offshore PV. Since the first quarter earnings reports will be released intensively in April, some energy material companies—like upstream lithium mines and lithium battery materials—are performing well due to rising prices. After the hype around pure energy concept stocks ends, we should consider the new energy storage and energy substitution mentioned in this important meeting, combined with the global environment’s green electricity advantages. This could attract capital to battery companies, electrical equipment, and related sectors.

Special Reminder: The above information is for reference only and does not constitute investment advice. No stock recommendations are provided! Investment involves risks; please proceed cautiously!