[Red Envelope] Chaotic market buying dips is king; focus on core opportunities in optical communications and pharmaceuticals

I just took 10th place in the 96th session of the Taogubaa Witness Cup live trading competition, with a single-month return of 47.89%.

This performance would not have been possible without all the friends who have quietly supported me along the way, cheering me on and encouraging me. I sincerely thank everyone for your companionship and trust! The road of investing is long. In the future, we’ll continue working together to improve, delve deeper into the market, master timing, and push toward higher goals together—see you at the peak, and win together in the next phase of the market!

I. Overall overview of today’s market

On April 3, the overall A-share market showed a low-volume pullback and widespread declines among individual stocks. The three major indices moved in different directions, and overall market sentiment leaned cautious. By the close, the Shanghai Composite Index was at 3880.10 points, down 1.00%, and it fell below the key 3900-point level. The Shenzhen Component Index was 13352.90, down 0.99%. The ChiNext Index was 3166.06, down 0.21%, relatively more resilient. Total trading volume across both markets was about 1.66 trillion yuan, slightly lower than the previous trading day. Across the whole market, more than 4700 stocks declined, with only about 700 stocks rising. The “making money” effect was weak, and the market was in a typical phase of chaotic game theory.
II. My personal trading for today

The current market is in a chaotic correction phase. Hot themes rotate quickly with poor follow-through. Chasing high prices easily leads to getting trapped, so I have always adhered to a steady trading approach of only buying on dips (low absorption), not chasing highs, while strictly controlling position size and risk. Today during the session, I bought on dips in batches to set up positions in four targets: Zhongli Group, Asia-Pacific Pharmaceutical, Zhaoyan New Pharmaceutical, and Sutaishen.

Focusing on the pharmaceuticals sector and stocks with low positions and upside potential aligns with the core logic of dip-buying arbitrage in today’s market.

In the earlier post, I clearly pointed out that we should follow a trading mindset of eliminating the weak and keeping the strong. During yesterday’s session, I decisively cleared three stocks whose price action had turned weaker. From today’s market display, both of these stocks have continued to weaken, with their declines among the largest.

Friends who strictly followed the trading rhythm successfully avoided the risk of the subsequent pullback, preserving the gains already achieved. This also confirms the importance of “cutting losses in time and keeping the strong while getting rid of the weak” in a chaotic market.

III. In-depth analysis of popular sectors
(1) Optical communications sector
Today, the optical communications sector became one of the few bright spots on the board. It showed a batch of first-board starts, and the ranks gradually got more complete. Attention from capital increased significantly, showing clear signs of a sector start. I’ve raised it by one notch of focus. Within the sector, multi-day consecutive limit-up stocks performed impressively. Huiyuan Communications and Xinneng Taishan both successfully advanced to the second board. Among them, Xinneng Taishan achieved 7 boards in 9 days, becoming the sector’s core high-roller. There were also many first-board targets, including Tongyu Communications, Yitian Shares, Deko Li, Zhizhen Technology, and more. Covering both 10cm and 20CM targets, the sector effect is gradually becoming more visible. Going forward, it has potential to keep fermenting, so it’s worth close tracking.

(2) Pharmaceuticals sector
The pharmaceuticals sector showed differentiation today. The core high-roller, Jinzhou Pharmaceutical Industry (Jin Yao Yaoye), forged ahead strongly with six consecutive limit-ups, standing alone to carry the banner of leading the sector. However, the rest of the stocks in the sector had very poor “following” effects. Most targets rose and then fell back, with weak price action. Overall, the sector effect seriously lagged behind, so I’ve lowered it by one notch of focus. Whether the sector can recover afterward depends entirely on Jinzhou Pharmaceutical Industry’s persistence and whether it can drive a collective return of funds to the sector’s stocks. Keep a close watch on the leading stock’s driving effect.
(3) Other sectors
Due to the market’s overall weakness and rising risk-avoidance sentiment, none of the other sectors showed standout performance. Hot themes were scattered with no follow-through. There was no actionable main theme opportunity, so I won’t focus analysis for now.
IV. Trading plan for the next trading day

(1) Pharmaceuticals sector
Focus on the trend of the core leader, Jinzhou Pharmaceutical Industry, and closely watch whether it can drive an overall return of funds to the pharmaceuticals sector. If the sector shows a clear return signal, I will focus again on Asia-Pacific Pharmaceutical, Zhaoyan New Pharmaceutical, and Sutaishen that I dipped into earlier. These targets have built up volume noticeably in recent days, and their chip structure is stable. Once funds return, they are likely to see a “pulse-style” upward move, and could yield decent returns. If Jinzhou Pharmaceutical Industry weakens and the sector remains sluggish, then stay on the sidelines and don’t add positions blindly.
(2) Optical communications sector

1. Opportunity from 2 to 3: Focus on whether Xinneng Taishan can advance from 2 to 3. In terms of execution, I don’t recommend directly hitting a second-by-second board (second-board pull). This is to avoid being trapped if it explodes intraday. Wait patiently for confirmation of the re-closing (back-to-close) of the board. If during the session it keeps failing to open the board and doesn’t give an entry opportunity, then don’t force a ride.
2. Opportunity from 1 to 2: Screen first-board targets within the sector for stocks with strong price action and abundant volume. Focus on Tongyu Communications, Yitian Shares, and Huiyuan Communications. These targets have high sector recognizability and high capital attention, and the probability of advancing from 1 to 2 is relatively higher. Selectively buy on dips to build positions.
   (3) Other sectors
   No specific targets to focus on right now. Continue to stay cautious, make no judgments, and wait until the market shows a clear main theme signal before making decisions.
   #龙头股# #龙头战法# #光模块#

The way to trade lies in planning your trades, and trading your plan. Market conditions change in an instant, and it’s hard to predict the ups and downs—but trading discipline is always the unbreakable bottom line.

When the sector rankings are complete and market sentiment is strong, boldly concentrate on the leaders and the key front-line targets to seize opportunities in the main upswing phase.

When the market enters a chaotic correction period, do not open positions blindly. Either choose to stay in cash and wait quietly for the right time, or open positions only to execute dip-buying arbitrage.

Only by aligning with the market’s rhythm and flexibly adjusting your trading strategy can you stand firm for the long term in a volatile market and steadily achieve growth in returns!

Short-term trading and sparring: don’t compete for who is faster in the moment, don’t chase windfall gains in a single day. Let the water not race to be first—what matters is relentless, continuous flow.