Amid the lively trading scene, storms are brewing beneath the surface.

To sum up:
In May, Guangzhou’s weather looks like it’s boiling with heat waves, but actually, it’s rainy and windy. The index surged to 4225 points, with a massive trading volume of 35.4 trillion yuan—this momentum is as fierce as the tide of the Pearl River, indicating that large funds are truly entering with real money, and the market’s “backbone” is solid. But as you can see, 30% of the limit-up stocks exploded, and many popular stocks that were shining yesterday are now taking a “big dive” today. So, clearly: the big players have already started, but it’s a matter of “picking and choosing,” not “rushing blindly.”

Next, the strategy:
Don’t be blinded by the lively index. The current market is like shopping in Shangxiajiu—crowded and chaotic—you need to keep an eye on your “purse.” Strategically, you should “abandon the high and seek the low, discard falsehood and keep the true.” For those stocks that have already hit multiple limit-ups and are now releasing huge volumes, like a pot of overcooked old fire soup, the flavor has gone, leaving only heat; it’s best to stay far away. The real opportunities are hidden in sectors that have just started and have genuine strength.

On Friday, AI application performance diverged. The sector of Le Yi Media, which entered the observation zone at low levels, showed strong upward movement. Unfortunately, with limited support, although it temporarily recovered in the afternoon, it couldn’t sustain the rally and was eventually abandoned. The relatively weaker high-tech stocks slowly broke below the 10-day line, with the trend slightly hindered; wait for a recovery before observing again.

The market is bustling with voices, all buying in unison, but we need to beware of the risks of excessive uniformity. Gradually reduce attention, and wait for a genuine divergence before rolling up your sleeves again.

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Deep Dive: 0511 Market Sentiment
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1. Sentiment and Funds
Today’s market shows a “fire and ice” tearing apart in sentiment. On one side, the index is soaring, with nearly 5 trillion yuan in trading volume, indicating a large influx of “new tea drinkers” attracted from outside the market, igniting bullish enthusiasm—this is the fundamental reason the trend can go further. But on the other side, short-term sentiment is like a roller coaster: stocks that hit the limit yesterday only have an average premium of 2.55% today, and many high-profile stocks with over 10% retracement, with limit-up stocks frequently being smashed open. This clearly tells us that funds are experiencing a fierce “high-low switch.” Smart money has already pulled out from those high-flying stocks and is shifting to explore new stories at lower positions. So, now it’s not about whether to buy but “what to buy and when.” The market has given us an expensive ticket, but not a good seat.

2. Hotspots and Core Sectors

Today’s multi-limit-up stocks form a very interesting pyramid structure, like a tower that wobbles at the top but is extremely solid at the base.

Top (4+ limit-ups): Fuda Alloy with 5 consecutive limit-ups, Datang Power with 4. They are the “weather vanes” of the market, but today’s collective retreat of high-priced stocks indicates this is already a “high-risk zone,” and the willingness of funds to continue the relay is decreasing. Their role is more about maintaining market heat rather than chasing highs.

Middle (3 limit-ups): This is the most beautiful scenery today. Tongding Interconnection, Baoding Technology, Hongban Technology, Taijing Technology, Shandong Fiberglass—all are 3-day 3-limit-up stocks. This tier is crucial; they absorb the funds flowing out from the top and form a strong sector effect, which is the core force for the market’s continuation.

Base (1-2 limit-ups): 73 first-limit stocks, with a 15% upgrade rate from first to second limit-up. This data shows that every day new stories are being uncovered, but funds are very selective—only a few can stand out.

2.1 Sector: Optical Communications
The most dazzling sector today is optical communications. 17 stocks hit the limit-up, which is no longer just a simple hotspot but a “collective carnival” of funds. The logic behind it is solid: explosive demand for AI computing power, and optical communication, as the “information highway,” benefits directly from this. It’s like building new transportation hubs—related materials and engineering companies will be the first to benefit.

Core stocks analysis: The core today is undoubtedly the few 3-limit-up “little giants”—Tongding Interconnection, Taijing Technology, Baoding Technology, Hongban Technology. Their ability to stand out among many competitors and form a neat echelon indicates they have gained recognition from the most active market funds. Especially optical Xun Technology, which has two days of two-limit-up momentum, is worth watching. This sector has moved from “concept speculation” to “performance realization,” making it a highly certain direction right now.

3. Worth Noticing

Based on today’s market, instead of chasing stocks that have already soared, it’s better to look for opportunities on the just-takeoff runway.

1. Core of optical communication: Today’s 3-limit-up stocks Tongding Interconnection and Taijing Technology have established leadership. If they continue to strengthen, they will drive the entire sector. Also, keep an eye on those stocks within the sector that just started their first or second limit-up today—they might be the next potential stars.
2. The sustainability of the chip sector: Chips also had 18 stocks hitting the limit-up today, maintaining heat. Although the core stocks are not as prominent as optical communications, as another wing of the tech mainline, rotation opportunities still exist. Focus on stocks with good trends and moderate volume increases.
3. “Active mouth” of the computing power sector: Although only 8 stocks hit the limit-up, Fuda Alloy, with 5 consecutive limit-ups, remains unshaken. It represents the most resilient fund attitude in this direction. Use it as an observation sentinel—unless it crashes sharply, the computing power sector still has chances for repeated activity.

The current market is like a freshly made double-skin milk pudding—its top layer of milk skin is the most fragrant but also the easiest to break. We should enjoy its sweetness but be careful not to burn our mouths.

Patience and selective stock picking are more important than blindly chasing gains.

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【Important Notice】: The above is only a sharing of ideas and does not constitute investment advice. The market carries risks; invest cautiously!