[Red Envelope] 2026.4.1 Review: Big A's Clear Repair Day, but the resonance is with the pharmaceutical sector?

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1. Pre-market Auction Analysis
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**A day in the stock market starts with the pre-market auction. Today, the top in the pre-market auction was Zhaomian Needle. Although there are a sealed orders of 1.7 billion, this is a stock involved in mergers and acquisitions and restructuring. For M&A restructuring stocks, a 170 million sealed order isn’t that big, so its guiding effect isn’t very strong. Still, its medical-related attributes will definitely provide a boost to the pharma sector. The second in the pre-market auction was Demingli, storage-related. This direction is generally something institutions do. It basically doesn’t play the 连板 (consecutive limit-ups) game. Moreover, with sealed orders in the range of several billion, it’s still not enough for a stock like Demingli in terms of its market cap. What’s more, the institutional funds will gap up and then get sold off right away—let alone a one-word limit-up board.

For Demingli to be smashed open after the auction is, frankly, only to be expected. I’m honestly very curious about what kind of funds topped Demingli with a one-word limit-up. Isn’t that basically handing them over to get smashed by selling? The third in the pre-market auction was Optoelectronic Shares, a fiber optics concept. This company’s market cap isn’t high, but this direction is also something institutions are doing. Since institutions don’t usually do 连板, it was also smashed open later. Here everyone needs to pay attention: in some typical institutional directions—like chips, fiber optics, and storage—most of the main force inside those themes are institutions. They basically don’t do 连板, and they have the habit of “gap up and must sell.” It’s suitable for low-buying on dips, but not for chasing after strength.

The fourth in the pre-market auction was Beifang International, infrastructure construction. The logic for this theme is post-war reconstruction. That logic is way too far-fetched; it feels like a quantitative model collected some news and propped up the board. It was also smashed open afterward. The fifth in the pre-market auction was Shenzhou High-Speed Rail, high-speed rail tracks and transportation interconnection. Today’s one-word limit-up board is within expectations, because yesterday’s theme had some fermentation. If the theme was fermenting yesterday, then today it should open at one word. There’s no real guiding effect, but later the theme fermentation didn’t keep up, and it got smashed open as well—坑了 Anhui Construction to the same level.

2. Limit-up Streak Tiers
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**Now the market has turned back into a five-board cliff. After rumors that the “height breakthrough” has happened, follow-through should get better. But looking at it now, it seems overly optimistic. No matter how you look at it, you can’t see that follow-through is getting any better. This should be because regulation has been strengthened. The folks upstairs think: with the index in our hands, there won’t be surprises—so they strengthened regulation to suppress speculation. As a result, in a broad-based up-market, short-term consecutive limit-ups are really hard to describe. Even dogs would shake their heads. Perhaps the springtime for follow-through hasn’t arrived yet—but it may already have passed.

Four-board
Jin Yao Pharma (津药药业), a pharma sector leader. Today’s sector fermentation was quite strong. Tomorrow the expectation is still a one-word limit-up. But if tomorrow opens as a one-word and the sector fermentation can’t keep up, then when you later冲击六板 (challenge the six-board limit-up), the willingness of off-board funds to provide follow-through will be much smaller.

Two-board
Tongda Shares, power grid equipment, and power is one of the few remaining “live ammunition” sectors. But the leader is still sitting on the downside board. What’s the point of topping it again—are they trying to let it retreat?
Kailaiying, pharma-related. It’s a pharma “capacity” stock. But this positioning already has Jiu’an Medical in it. Inside Jiu’an, there are strong institutions; they run far more aggressively than this one.
Xinghui HuanCai, plastic plus mergers and acquisitions and restructuring. The recent 20cm profit-making effect seems to be okay. Yesterday’s Hongchang Technology delivered a pretty high premium.
Xinhonggang, power-related. A small-cap stock. It stole a chicken and got on the board late in the session—possibly pricing in expectations for tomorrow’s power-sector rotation back.

3. Trend Analysis
Recently, the index has indeed been oscillating upward as expected, but there aren’t really any standout targets in terms of trend direction. Everything feels quite stifled. It might be because the current trading volume can’t be ramped up.

1. Changfei Optical Fiber, fiber optics concept. At present, it’s the representative trending stock in the market. Yesterday it was the third buying point. Today it gapped up too much and got smashed straight into a “pig head.” For these institutional stocks, a gap-up is definitely something they sell—at least they sell part of it—because institutions have the “gap up and must sell” habit, and especially for this kind of passive gap-up.

2. Yongding Shares, communications equipment. Today it pulled up to a limit-up board. It’s not far from the previous high. Worth observing.

3. Hengteng Optoelectronics, communications equipment. It had a gap-up that topped the opening, but it was quickly smashed down below the waterline. The stock itself has been staying near new highs all along, but the intraday price action has been hard to make sense of. There’s no clear buy point.

4. Yutong Bus, commercial vehicles. A stock hitting new highs. Today it was kept under pressure by moving averages all day. Late in the session, it stole a chicken and climbed onto the moving average line. The first buy point feels a bit forced—better to watch for the second one.

4. Market Snapshot Summary
From the index perspective, today is a clearly marked “repair” day. After all, the overseas market started rallying earlier—US Nasdaq surged more than 3 points, and both Japan and Korea rose even more aggressively than one another. It’s a sure thing that Big A will be stimulated to gap up on the open. Opening up by more than 1 point this morning was within expectations, nothing exceeded expectations. But this gap-up isn’t necessarily good, because the recent market has been very “anti-human nature.” It tends to be low-open and then rally, low-open and high-close; high-open and then fall, high-open and low-close. For a passive gap-up like this, the first thing to prevent is the “gap up and then sell for realization” pattern of “high-open low-close.”

After the market opened, the money really did come in for a wave of realization—many stocks were smashed down below the waterline by that wave. The index also fell back directly. Although later many stocks didn’t manage to pull back, the index still got supported at high levels, even rallied back and filled the gap above. This is because the national team was driving up the securities sector. But this kind of behavior doesn’t seem to be recognized well by funds. The large-cap market’s trading volume has been unable to be put out continuously, showing that overseas funds don’t want to enter the market.

With trading volume not coming, then the main force on the board must be quant trading. Judging from today’s tape, the market is indeed being dominated by quant strategies. A large number of targets surged up and then retreated. The rotation speed between themes was extremely fast. Within less than an hour after the open, there were already around ten themes rotated through. It dazzles the eyes. It’s basically one chase sets up another trap. So although the closing index is a big bullish candlestick, and more than 4,000 stocks are up, this basically only benefits early starters. The “chasing higher in the intraday” experience should be quite bad.

Theme directions: first is the former mainline—power. Today effectively announced the end of phase two. All the core stocks saw deep pullbacks. Especially Hua Dian Liaoneng (华电辽能). After a weak repair yesterday, today it once again pressed it down to the daily limit-down. The power stocks that had fallen behind earlier also all followed an “A-share correction” style. Many of the names near the top of the losers list today are power-related stocks. This kind of action is very damaging to market sentiment. In the short term, this theme shouldn’t be able to rise again. The old batch probably can’t be counted on. It can only wait for Hua Dian Liaoneng to stop the decline and stabilize, and then let new faces lead into the third wave.

Then there’s commercial aerospace, which has also been one of the better-performing themes recently. But today, even with the Sword God Shares opening at one-word limit-up as an assist to Shenzhou High-Speed Rail, it still didn’t quickly advance and lead the theme fermentation. And Shenzhou High-Speed Rail itself didn’t have enough driving force—so the theme fermentation didn’t take off. After Shenzhou High-Speed Rail got its board blown up, Sword God Shares basically had no more hope of going back to a board. For Sword God Shares to not progress into five boards, it’s largely because of the current five-board suppression and the impact from the previous high. But Sword God Shares is a capacity stock; it still keeps the possibility of turning trend later.

Next is pharma. This direction’s action today was unexpected. Because today is a repair day that’s clearly telegraphed. By logic, this kind of defensive “hedging” theme should be under pressure. But looking at pharma’s performance today, this sector is moving in resonance with the index—meaning the pharma theme has changed. It’s no longer purely a defensive theme; it has become a main rally theme resonating with the index. Since the index’s outlook afterward is favorable, if pharma continues to resonate with the index, there’s a possibility it can run as a mainline.

I think this pharma “resonating with the index” attribute was conferred by the stock Menovo (美诺华). Menovo is a stock at the 3.24 market sell-off low stop point. It was once considered a leader or a member of the leading “ladder” group in pharma, but later it went into an over-expectation fermentation phase. It separated from the leaders’ path as the index moved to that node batch and it became the last one among those node-related targets. Menovo went up to the height of five boards. Then during the five-to-six transition, it showed fairly strong negative feedback. After all, this stock itself had many issues—first, its share price is too high, which is not favorable for follow-through; second, it has bonds that can be arbitraged.

Then on the day Menovo broke down from the board, Jin Yao Pharma (津药药业) separated from Menovo, successfully advanced to three boards. And when the index dipped in the afternoon, it fermented in the back rows. So the new pharma leader is Jin Yao Pharma. This stock has many advantages over Menovo: first its share price is lower; second its market cap is smaller; and third it has no bonds. If pharma wants to grow into a mainline, then it must have one stock to challenge the height, break the five-board cliff to advance into six boards—only then can the theme potentially run as a mainline. And without a doubt, Jin Yao Pharma is the most suitable target. Going forward, the focus of tracking pharma’s development should be anchored on Jin Yao Pharma’s performance.

As usual, let me summarize today’s operations. Today’s operation is basically no operation, because I didn’t see any really good opportunities. In the morning, the open was a pile of waterfall-style sell-offs. Although the overall market showed a broad “everyone up” pattern with around 4,000 stocks up, most of that money was made by people who already had first positions yesterday. If you entered today, the overall feel shouldn’t be good. The market picture overall remained chaotic and disordered. Only after pharma fermented later did it stabilize. Next, this theme is the direction I will focus on.

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5. Must-See Daily
Also, if everyone is interested in my trading system or has any questions, you can check the six posts below. The stock-selection formula and answers to the trading system and basic questions are all in them!

[Red packet] High-quality post 16, On cash staying out and trading modes’ suitab

[Red packet] High-quality post 15, Quantitative trading system: Quantitative walk

[Red packet] High-quality post 13, The Road to Seek the Dao

[Red packet] High-quality post 11, Call auction trading system (more

[Red packet] High-quality post 10, Software trading system, little-known

High-quality post 8, Call auction system and problems in the trading process

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