[Red Envelope] Technology disagreements, aerospace and machine rotation, watch for a rebound on Monday

Summary: Pre-market US and Iran tensions rise, combined with a tech correction in US stocks, leading to a gap-down opening in A-shares. Cambrian and Hygon Information lead the adjustment, the Sci-Tech Innovation 50 underperforms, lithium batteries attempt to gain ground, Yongshan Lithium Industry surges, Tianhua New Energy spikes then plunges, CATL declines with continued weakness in lithium batteries. During the session, robotics and commercial aerospace rotate higher, in the afternoon Guangxun Technology surges with communication stocks, but the profit-taking effect is moderate, with the average stock price only up 0.25% [Taoguba].

Market overview:
During the opening, both markets opened lower with the Sci-Tech Innovation Board leading the decline as expected, due to the tech correction in US stocks. Notably, Jin Tanglang opened limit down, Dongyangguang had no premium, and core sentiment diverged. Funds began rotating around low positions, with software stocks like Guoan Shares and Nanwei Software opening flat, computing power stocks like Runjian Shares and optical module stocks like Taijing Technology opening flat, innovative drug stocks like Zhongsheng Pharmaceutical also flat. As previously discussed, flat openings indicate a clear direction, but today’s market is not straightforward because weak core leaders will suppress intraday strength.

Lithium batteries:
On the tech side, divergence appears as lithium batteries attempt to gain ground. Yongshan Lithium Industry ignited and surged, Tianhua New Energy rose sharply, and with Tongding Internet, Hongban Technology, and Baoding Technology all advancing to the second board, PCB, fiber optics, and CPO stocks are flowing back. Lithium batteries started to surge then retreat, while Cambrian and Hygon Information continued to weaken, dragging tech stocks down. Funds activated robotics, with Wuzhou Xinchun leading the board, boosting Daye Shares, which hit the daily limit. Robotics began to ferment, with Rizhao Precision and Leise Intelligent following the trend. Wuzhou Xinchun represents robot capacity, Daye Shares is a continuous rebound, so the core sentiment is emerging. The simplest way to observe this is through momentum.

In the afternoon, Guangxun Technology ignited and surged, Hui Lu Eco and FiberHome Communications hit the daily limit to assist, optical modules flowed back, Yizhongtian was dragged down by the Sci-Tech Innovation chip sector, and the quantification sector ignited aerospace development stocks. JuLi Suoju, Shenjian Shares, and others surged with high recognition. China Satellite attempted to limit but was overwhelmed and plunged. In the late session, JuLi Suoju experienced a collapse on the minute chart. Quantification stocks should be trusted early, not chased on the rise—Shenjian Shares and JuLi Suoju are clear examples.

Sector-wise: structural rotation market,
First tier: AI,
Second tier: all others. As long as AI has sub-sector rallies, the trend isn’t over. AI segments include overseas and domestic markets: overseas mainly around fiber optics, CPO, PCB, storage chips, liquid cooling servers, copper foil; domestic mainly around computing power leasing and chips. Most sub-sectors have hit new highs. Despite a correction on Friday, most chip stocks remain above their five-day moving average. The US stocks on Friday—Micron, SanDisk, AMD, Intel—rallied significantly, likely to trigger a recovery on Monday. Robotics and commercial aerospace also dominate; can they withstand the AI surge? Probably not. Therefore, a surge in robotics and aerospace on Monday is a chance to shift to the backseat. Most funds on the龙虎榜 are one-day traders.

From an index perspective:
Three consecutive days maintaining around 30 trillion market cap, compared to the previous 25 trillion, indicates volume expansion and sluggish growth. Currently, the index remains above the five-day moving average, showing decent support. The Sci-Tech Innovation sector’s divergence could be repaired at any time. Coupled with the US tech stocks’ big gains, the index is set for an attack on Monday. Overall, focus on individual stocks rather than the index; stick to core sectors around the five-day moving average for swings.

Popular stocks:
Great Wall of China:
Starting phase, speculating on external CPU demand. On Friday night, AMD and Intel in US stocks surged, likely to open high on Monday. If they actively rebound and hit the limit, look for further gains. Currently, compare to the second phase of Dongshan Precision. Use the five-day moving average for T+ trades. Since Dongyangguang has no premium, and Jin Tanglang opened flat, indicating potential adjustments at mid-to-high levels. Due to uncertainty about the divergence, reduce positions proactively. Watch for dips and re-entry opportunities.

Guangxun Technology:
Recently the strongest optical module stock, driven by quantification. Staying above the five-day moving average indicates no top yet. Long-term accounts remain focused.
Zhongtian Technology:
Fiber optic demand is expanding, showing strength for two consecutive days. Weekend news about cooperation with Huawei has fermented, and expectations for acceleration on Monday are high.

Summary:
Before AI hardware experiences a wave of limit-downs, avoid focusing on other sectors; rotation is the essence. The main value lies in AI-related stocks.

The above analysis reflects personal views only and does not constitute investment advice. Trade at your own risk! If you find this helpful, please give a free like. See you tomorrow before the market opens at 9 am with new ideas! Lastly, thanks to friends for their support with the following tickets:
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