10K to 20K Second Doubling Challenge Day 10

Today’s Review:
Good evening, everyone!

The core idea shared yesterday focused on the leading opportunities for a rebound in the power sector. I overlooked Guangxi Energy as a target. This morning, Guangxi Energy was directly locked by funds at the opening, which significantly reduced the cost-effectiveness of other power sector targets attempting to break through 1 into 2. Thus, Guangxi Energy has become the clear leader in this round of the power market rebound. Considering the signs of funds returning to the power sector in the afternoon, it is highly likely that it will open at the limit again on Monday.

However, how far it can go in the future ultimately depends on the performance of core targets within the sector, such as Yunnan Energy Holdings and Huadian. Currently, the performance of these two stocks is relatively stable, especially Yunnan Energy Holdings, which just saw the end of its regulatory period today, and is expected to continue its strength next week, possibly even reaching new highs. The trend of Huadian’s stocks showing an 8+N pattern is also expected to continue. To determine whether the power sector’s market is ending, we just need to closely watch the feedback from Yunnan Energy Holdings and Huadian next week. For the sector to maintain its strength, it will require continuous catalysts from news; otherwise, the enthusiasm will likely gradually diminish. After all, the power sector has become so evident that it cannot be more evident. Once new low-position themes emerge to divert funds, the profit effect in the power sector will inevitably decline sharply. Of course, it’s unrealistic to say that it will directly retreat and conclude, but if themes like lithium batteries continue to attract funds, the power sector will likely fall into a situation of “no rebound at low positions, only high-recognition targets huddling together.” The emergence of such signals basically indicates that the power market is nearing its end.

In contrast, the lithium battery sector may replicate the earlier power sector’s pattern of “divergence—return—further divergence—further return,” and the profit effect is worth looking forward to. (The above is purely personal analysis; specific actions should be based on actual market performance.)

Now let’s take a look at the overall market situation. The issue of reduced trading volume still hasn’t improved. The index opened low and rose during the morning session, but the trading volume throughout the day failed to expand effectively. However, Rongjie Co. in the lithium battery sector performed brilliantly, closing the morning high and then sealing the board in the face of divergence; this sector should have been a good opportunity to accumulate positions today. Based on today’s strong performance in the lithium battery sector, Rongjie Co. is likely to have a limit-up expectation next Monday.

Regarding lithium batteries, we discussed the strategy yesterday; it and the power sector have a typical seesaw relationship. We should focus on the core high-recognition target, Rongjie Co. The lithium battery sector started yesterday and continued its strength today. Following short-term rhythms, there is a high probability of divergence next Monday. As long as it’s not an extreme strong divergence trend, funds will likely enter early on Monday afternoon or Tuesday to take positions.

Here we can outline a potential trading strategy: next Monday, the power sector will likely see a return for repair, while lithium batteries will be in a divergence phase after consensus; by Tuesday, the power sector is expected to show divergence, and funds will likely flow from power to lithium batteries. Based on this logic, funds for lithium batteries will likely start moving on Monday afternoon. Whether this analysis holds will depend on whether the actual performance of the two major sectors aligns with expectations on Monday. If the trends match, friends without positions in lithium batteries can consider gradually buying in on Monday afternoon.

Ultimately, the core focus next week will be whether funds from the power sector will gradually migrate to the lithium battery sector.

Next, let’s discuss the specific situations of various sectors:

Power Sector: During the morning auction phase, Huadian Liaoning Energy opened with a direct limit down, which was actually in line with expectations. After all, it had already shown signs of funds dumping at the end of yesterday’s trading; incoming funds were inevitably panicking, and it was highly likely that they would flee by placing limit-down orders overnight. However, after the opening, funds rushed to buy, leading to a high opening. Ultimately, the stock price fluctuated sideways throughout the day, never breaking below the opening low, clearly indicating controlled volatility. Expectations for next week are also present.

Chemical Sector: Here’s an observation direction for everyone; I suggest focusing on the upstream subfields of lithium batteries, such as lithium iron phosphate and electrolytes, which are likely to strengthen in sync with the lithium battery sector.

Pharmaceutical Sector: In the morning, as the power sector showed no significant return, funds chose to flow back into the pharmaceutical sector out of defensive needs. Minohua successfully progressed, opening up the sector’s height and attracting a lot of funds for arbitrage. However, from a short-term perspective, this kind of market is likely a one-day affair, and participation should be cautious.

Computing Power Sector: Overall performance remains weak. Although Aorui Technology saw funds attempting a counterattack after the auction and completed a reversal after experiencing divergence, from the order book, its influence on the overall computing power sector is minimal. Currently, the computing power sector finds it challenging to attract combined market funds, and the sector’s connectivity is poor. In the short term, we can only see if Aorui Technology can create an independent market through trends and popularity, becoming actively sought after.

Finally, let’s talk about the operational reminders for next Monday: over the weekend, there will likely be quite a few self-media outlets promoting the lithium battery sector. Here, it’s important to note that if the hype is too intense, it may not be wise to blindly join in on Monday, especially since there are already expectations of divergence. There are already subtle signs of high-low cuts between power and lithium batteries. Whether lithium batteries can completely replace power as the new main line requires us to see how it unfolds step by step.

As a short-term trader, my principle has always been to focus on current trades and predict the next day’s trends. Speculating too far into the future is akin to baseless conjecture.

Today’s Operations:
Yunnan Energy Holdings: Reduced position by 9 points. Due to the reduction at the end of yesterday’s trading and still having a floating loss, I will consider adding positions on Monday based on the situation.

Today’s Actual Trading: