[Red Envelope] The CPU + independently controllable market is just beginning, ordinary people are watching for missed opportunities with envy, experts are watching for divergences to buy the dip, next week's highlights...

1. Focused ongoing observation and commentary on individual stocks: [Taoguba]

2. CPU, Semiconductors:

Northern Huachuang, Tongfu Microelectronics, Haiguang Information, Sugon, Feikai Materials: Before the May Day holiday, the 60-day moving average began tracking and observing, discovering that this sector showed clear signals of potential initiation at that time, and continues to be monitored.

2. Optical Communications, PCB:

Zhongji Xuanchuang, Shenghong Technology, Xingsen Technology: Started tracking and observing from Qingming Festival, found that overseas chain signals of potential initiation were obvious at that time, and are still under continuous observation;

3. Bottom-building style:

Northern Rare Earths, Eastmoney are still being tracked and observed;

………………

Still the same point: Daring to be actively bullish at low levels reflects cognition and courage; holding and tracking the rise from low levels shows pattern and vision; the market never lets down those who truly understand it, but always harvests the gamblers chasing the rise and falling.

2. Market commentary:

1. Index:

The index still maintains the projection view from before the May Day holiday, believing that the current rebound since March 24 is in the final wave of a 5-wave correction within a smaller structure of the rebound. As shown in the above chart (projection chart before the May Day holiday).

Next week projection:

Still maintaining the forecast from half a month ago, believing that the rebound starting at the end of March will see its peak around mid-May;

Starting late May, it will be the next major cycle market, meaning the rally initiated in March is a quarterly report cycle; all major surges now are from the March start, such as when the index officially began to correct from 4197 points on March 3, the storage sector’s Demingli started on March 4, and the lithium battery and optical module sectors also initiated in early March. In other words, when the index started its correction from the spring high, the main line of the quarterly report rally in April and May was already set in motion at the beginning of March. We identified the storage sector’s initiation signal on March 4, and along the way, various sectors’ bottom signals have been witnessed and tracked. So there’s no need to prove old stories here.

What I mainly want to say is: if this wave of rebound initiated in March is expected to end by mid to late May according to the projection, what does that imply?

Clearly, it indicates that a major cycle is about to switch, and we are entering the mid-year market phase, which is what we should pay attention to next.

Of course, if you missed the bottom of the storage chips, optical modules, and self-controlled and controllable sectors at the start of the March-April-May cycle, and the mid-year big cycle is about to begin, you must not miss it again. So, it’s best to improve your cognition early and enhance your stock recognition and selection ability as soon as possible. After all, as long as the stock market doesn’t close, waves of market opportunities keep coming. Making money depends not on whether there are opportunities, but on your ability and cognition. Without capability or sufficient understanding, even if there are opportunities, you’ll still be left on the sidelines, lamenting missed chances, and missing the divergence and adjustment opportunities. You’ll be chasing and selling at the top in a good market, missing multiple main upward waves, and becoming a leek (retail investor) due to chasing the rise and falling. This is the root cause for most retail investors.

Therefore, learning with the few who have high cognition, staying away from the influence of mass sentiment, is an undeniable truth. Many people just can’t understand this, always blaming the market’s poor performance, aggressive quant strategies, or style changes, but never consider that their own investment values are flawed—treating investing as a game of fixed win or lose, believing luck determines the outcome. But investing is a long-term matter. Even if you get lucky and hit 5 consecutive boards in a week, if your cognition and ability lag behind, and your values don’t change, you’ll end up losing it all in a series of sharp drops. Since investing is long-term, you’ll realize that true masters in stock trading are those who can achieve long-term stable profits. As long as they can sustain upward growth over time, looking back, they will far surpass most retail investors. That’s an indisputable fact.

In summary, the index is expected to see mid-May, and after late May, it may officially enter the next new cycle—the mid-year big market.

3. Sectors:

Continuing to be optimistic about CPU + domestically controllable sectors leading, and the upstream of optical modules continuing the main upward trend!

From before Qingming, the bottom signals of optical modules were identified, and the bottom signals of domestically controllable sectors were identified over half a month ago. In just over a month, optical modules have nearly doubled in price, and the autonomous and controllable sectors have also entered a main upward attack wave.

This week, the AI computing power theme remains strong, with the market completing a logical shift from GPU diffusion to the entire industry chain of CPU, optical module upstream, and autonomous controllable sectors. Next week’s core focus: domestically produced CPUs / autonomous controllable, overseas chain optical modules, CWC laser chips / Faraday rotators / copper foil / electronic fabrics, etc. Multiple favorable factors resonate, supply-demand gaps continue to widen, and the performance and valuation windows are opening. The bullish outlook remains justified!

In fact, during Thursday and Friday’s index and market fluctuations, you’ll see that ordinary people outside are either jealous of missing out during rises or panic during dips, but true experts are actively identifying optical module bottom signals before Qingming and the autonomous controllable bottom signals before May Day, and daring to buy on dips during divergence lows on Friday, instead of following the crowd’s sentiment. That’s the difference between experts and ordinary investors.

1. Domestic CPU + autonomous controllable: triple positive resonance, core of the main upward

【Latest positive news】 Global CPU shortages and price hikes, Intel and AMD capacity sold out; domestic substitution rate rapidly increasing, major fund support in Phase III; leading orders scheduled through Q3, high performance growth.

【Rationale for rise】 In the AI intelligent era, CPUs are the core of computing power scheduling, demand doubles; overseas supply constraints, domestic substitution enters a golden period, with strong certainty of volume and price increases, and capital clustering clearly evident.

2. Overseas chain optical modules: global capacity shortage, high performance certainty

【Latest positive news】 North American cloud providers significantly revise upward AI capital expenditure; overseas optical module giants’ orders extend to 2028, domestic leaders’ 800G/1.6T modules are in tight supply.

【Rationale for rise】 AI computing explosion drives transmission bandwidth upgrades, 1.6T optical modules become standard; domestic leaders deeply tied to North American giants, with full order books, and valuation still room for upward revision.
3. Upstream segments: largest gaps, most elastic

• CWC laser chips: Silicon photonics modules’ explosive demand surge, overseas capacity constraints, domestic substitution accelerates, with a gap over 50%.

• Faraday rotators: Overseas duopoly supply cuts, prices soar, 1.6T optical module demand doubles, essential and irreplaceable.

• Copper foil (HVLP4): AI server PCB upgrades drive demand, global shortages, prices keep rising, leading companies’ performance pre-increases.

• Electronic fabrics: High-end copper-clad laminate demand surges, supply-demand gap exceeds 30%, price transmission smooth, elasticity far surpasses PCB leaders.

In summary, the first major cycle market starting from March is expected to peak around mid-May. Next week, continue to be optimistic about the AI computing wave, with the upstream of AI hardware, domestic GPU and CPU substitution, global shortages, and demand explosion driving the market!

Again, the same principle: stability is victory. The market never lets down those who truly understand it, but always harvests the chasing and panic sellers.

Finally, those who want to learn should seize the opportunity to study together. Staying with a high-cognition minority is key to avoiding the influence of mass sentiment.

Remember: macro perspective determines vision, cognition determines win or lose;

Lastly, I hope everyone can take a moment to like our main post, and if possible, support with a donation of 100 points. Your support is my motivation to keep sharing.

Special thanks to the friends who liked and tipped on the previous main post: Thanks to the top tipper: @Iamgroot
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