Hexun Investment Advisor Mao Zhongquan: Emotional grouping only chooses core leaders

On April 1, in a statement to Hexun Investment Advisory, Mao Zhongquan said that everyone should check whether, in recent days, they have noticed that capital suddenly poured into the commercial aerospace and Cross-Strait sectors, with some individual stocks repeatedly hitting the daily limit for consecutive sessions. Many people have asked whether this popular sector can be traded. Based on my nearly 20 years of hands-on experience, it can be traded; if you operate properly, you may be able to make a profit in the short term. At present, the main market index is in a range-bound bottoming stage, with each sector rotating without order, lacking a clear main line and popular themes. So is there still room for short-term trades?

By carefully observing the order book, you will find that before the latest surge, some capital was already lifting the previously popular sectors. Besides commercial aerospace that became popular last year, there are also earlier themes from the same period—namely the Cross-Strait between the two sides of the strait sector (i.e., the Fujian theme), as well as the A-Xia Shuidian power plant theme that broke out in mid-summer last year. Among some of these stocks, several have been hitting the daily limit one after another; commercial aerospace even saw a four-day consecutive limit-up. In the Cross-Strait sector, the previous wave’s leading stock also hit the limit for two consecutive days.

At this stage, the short-term strategy has already shown a “crowded positioning” logic. Among these popular sectors from last year, how should you choose short-term targets? First, choose the leader stock within the sector that has extremely high recognizability. Second, choose the “mid-cap general,” meaning the key stock in the sector that holds a certain position in the industry and has a large market scale. Third, choose the trend leader—these stocks may rise more slowly, but in the end they may still climb to 3x, 5x, or even more, forming a trend with high recognizability. Therefore, at the current stage, the targets that can be traded in the short term should follow an extreme crowd-positioning logic: choose the leader, mid-cap general, or trend bull stocks from the early popular sectors that the market’s capital recognizes.

(Editor: Zhao Yanping HF094)

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