[Red Envelope] Review on 3.30 - Signs of a retreat in the electricity sector, exploring new directions

The broader market opened lower for two straight days but then kept rallying strongly, and the chance of making fresh lows here again is pretty small. As of now, it looks like the market has stabilized.

Today there was a split in the power sector at the open, mainly because Yu Neng’s follow-on purchase plus Liaoning Energy’s intraday guidance caused two dragon-head stocks to hit the daily limit down, and also led to the trend stock Energy for Energy hitting the daily limit down as well—so today’s downside impact was still extremely strong. On the other hand, Hangdian here separated and moved higher on its own, so you should take a closer look at it.

What I had expected—a return of capital to the power sector—didn’t happen. Instead, on Thursday, a few themes that were on the front edge moved up. Here, it’s commercial aerospace, medicine, lithium mines, and more. Today the three power dragons all hit daily limit down, so the damage was a bit too big, meaning expectations need to be lowered. After that, it will most likely rebound once, and then gradually start paying attention to new themes.[Taoguba]

For the positioning of the power-sector stocks, it remains unchanged for now; it is still as shown in the picture below:

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Tomorrow’s highlights:

Consecutive limit-up lineup: 5 boards / 3 boards / 2 boards

From the consecutive limit-up lineup, based on last Friday’s recap analysis: if there are successful setups at 4–5 boards, it will have a positive effect on market sentiment. Right now, Menouhua deserves extra attention—turnover is at a five-board level.

There are fewer consecutive limit-up stocks, so let’s roughly analyze them:

5 boards:
Menouhua Xuanxue Lao Mei Fanghua Promises to China, plus the medicine overlay. Tomorrow, your attitude is extremely important.

3 boards:
Shenjian. The node. It has a lot to do with the aerospace sector; tomorrow, aerospace should be watched according to how it performs.

2 boards:
There are quite a few at 2 boards here. The main reason is the continuation of last Friday’s market action—here you have medicine, cpo, computing power, and so on.

For medicine, there are already stocks with 5 boards. If they continue to advance tomorrow, you’ll need to take it seriously. The news over the weekend also provided a bit of a boost.

For cpo, continuing the previous view: the bigger trend is still the key.

For commercial aerospace, continuing the previous view as well—weekend news provided stimulation; the stock is in an oversold rebound. As for when it can truly form a second-wave move, we’ll see.

For the power-and-computing coordination, at present the disagreement today was a bit too big, and it also counts as being driven by news (the follow-on purchase). Honestly, I don’t want to look bearish, but we also need to be cautious. Right now, it has come through with the biggest negative feedback in a long time—this kind of scene hasn’t been seen for a long while. After that, the sector’s idea can shift from power-and-computing coordination toward the energy-substitution direction, and the likely spillover directions are: new energy, lithium batteries, solid-state batteries, data centers, ultra-high-voltage transmission, and so on. Let’s move along and keep an eye on it.

List the recognizability of each sector:

Medicine: Lianhuan, Jiu’an, Menouhua

cpo: Farsing, Changfei Optical Fibers, Hangdian Shares, Hengtong

Commercial aerospace: Shenjiān, Zhaosheng, Xibu, Aerospace Development

Computing power: Guigang, Orich, Yunsai

Power: Yu Neng, Liaoning Energy, Energy, Zhongli

Tomorrow’s operation preview:

1. Power: It feels like this is a case of overselling. Tomorrow, the key is to focus on Yu Neng + Liaoning Energy. These two stocks must not keep hitting limit down. Liaoning Energy’s three consecutive limit-down to boards becoming invalid—so you can moderately try to bet on a return of this sector.

2. Commercial aerospace: Watch the strength of the positive news, and focus on how Shenjiān + Zhaosheng perform.

3. cpo: Continue to follow those major trend stocks.

4. Medicine: Hard to predict. The key is how Menouhua performs; you may also need to pay attention.

Here I need to say this: back then, the end of nonferrous metals gave rise to roughly four sectors. So after this round ends for power, it likely won’t be just one sector that comes out. Therefore, if the index stabilizes and moves upward, I believe it supports “many flowers blooming.” Wishing you all the best.

Statement: All individual stocks mentioned in the article are only used as recap analysis examples; the article’s viewpoints are only recorded as recap thinking. Make trades based on this at your own risk. ❗