[Red Envelope] Shenyang Shares and Jin Tanglang Logic Breakdown

We’ve been mentioning 4200 for several days, and finally broke through. Why have we always believed that the index would break through 4200? Let’s look at the Nasdaq Composite Index, which has already hit new highs, and then examine the three major tech sectors: chips, computing power, and communications, which have also already surpassed new highs. Combining these four data points, treating the A-shares market as a follower, breaking 4200 was only a matter of time. Today, the bidding volume surged, and the index gapped up and broke through, with the bidding funds showing a very clear attitude.

[Taogu Ba]

Auction Performance:

Yellow River Whirlwind: 1.09 billion, Diamond Concept

Hanbang Gaoke: 1.08 billion, Computing Power

Hongban Technology: 308 million, Communications (Printed Circuit Boards)

Tongding Interconnection: 260 million, Communications (Optical Fiber)

Fuda Alloy: 150 million, Computing Power (Data Centers)

The index opened sharply higher at 4201 points, with auction funds totaling 38.5 billion, an increase of 10.5 billion from the previous trading day. This high opening shows the funds’ sincerity, so there’s no need to panic over the initial dip. The high opening is backed by real cash, and the chips of the left side will have the chance to be unlocked and realized. Subsequently, a bullish candle was formed, pushing the index upward, with the three strongest sectors today being technology, computing power, chips, and communications.

Sun Yang Co.: On April 15, Sun Yang Co. clearly indicated its core position in the sector. Since the recovery on April 7, computing power has been the strongest sector, with liquid cooling being the most prominent sub-sector. The core stock in liquid cooling is Sun Yang Co., which resonates with the index. Liquid cooling is the strongest sub-sector of computing power, and Sun Yang Co. is the top stock in liquid cooling. Its low position was already made clear, and after the announcement, it accelerated from April 15. On April 20, it surged to the extreme, and by the close, it broke the limit. Although it was expected to open higher the next day based on its low position and sector expectations, it was affected by Yingweike’s earnings warning, which caused a sharp drop to the limit. This led to a deep water situation, and the stock was quickly punished with a limit-down, dragging the market into panic. The large order from Yingweike caused a one-word limit-down, crashing the entire market sentiment. The next day, Yingweike again hit the limit-down with a large order, and Sun Yang Co. failed to rebound. However, the stock volume increased that day, so the market did not expect it to go into deep water the next day, but there was an expectation of a water-level correction. Before April 23, analysis suggested Sun Yang Co. would not see A-shares’ kill, with a double-top expectation. Following this logic, Sun Yang Co. continued to form four bullish candles, but on April 29, it formed a bearish candle, indicating a likely shakeout. It first moved out, then, during the next shakeout, approached the April 22 level, confirming that there was no room for a correction. The following four days, as expected, produced four bullish candles. Today, it broke the previous high, fulfilling the double-top expectation. The volume was also high today, indicating that the funds betting on the double top have mostly exited, and new funds are entering for the second wave. Whether Sun Yang Co. can continue to rise in a second wave depends on current market signals, which are not yet very clear, as the high-position core sectors like chips, communications, and computing power did not give positive feedback today.

Jintanglang: On April 21, Jintanglang confirmed its core position in the commercial aerospace sector. On April 22, it surged with a one-word limit-up. On April 23, it showed a volume T-shape, but did not drive the sector higher. So, the next day was expected to have no premium. It opened 0.37 higher, but some funds felt it lacked premium and did not meet expectations. After a straight limit-down, it was recovered but then fell back again to limit-down. By the morning of April 27, it had already increased volume, so I commented at noon that even if it fell back to the limit that day, the worst-case scenario the next day would be a shallow water zone, which increased safety. Even if wrong, the cost was small, and the odds were high. The strategy was to profit from the liquidation of the April 24 profit-taking, and on April 27, to disprove the false signals from the anti-nuclear funds, as April 27 was a volume-based day, and the liquidation funds had exited. Quantitative traders prefer holding bloodied chips, and once they cut losses inside, the probability of a rebound the next day increases. Coupled with its core position in commercial aerospace, the sector rotation gave Jintanglang a limit-up. On April 29, it also caught the chip cleanroom concept, driven by dual logic of chips and aerospace, and unexpectedly surged to a 5+5 board. The opening on May 8 was limited due to negative news, which actually created a gap in expectations. At 9:19, the market was panic-selling, with over 3.54T in orders at the limit. By 9:20, over 200 million was locked in without cancellation. The funds placing the limit orders could no longer cancel, and outside funds saw the expectation gap, starting to buy the limit-down chips after 9:21. During auction, 353 million was traded, and those familiar with Zhuque Road’s auction volume could tell that the volume was sufficient. Combined with the order book and expectations, there was an upward push. The stock briefly turned red in the early session, and closed with a bullish candle. The two-wave momentum, with five boards each, is stronger than a single wave, so there is still an upward potential. Today, Jintanglang also hit two new highs.

Market Outlook:
Up 3,030 stocks, down 2,024 stocks, 92 limit-ups, 3 limit-downs, 5 large retracements, overall strength 72.
Based on the above market data, combined with Zhuque Road’s outlook, sector focus, and rhythm, the current index has effectively broken through, with a volume of 35,389 billion, and the direction is upward.

Minor Outlook:
The index broke through 4200 points, driven by the technology sectors we’ve been emphasizing: chips, communications, and computing power, which have become the market’s strongest sectors today. We’ve been saying for a month that technology is the carrier of the upward move. Looking back, the tech sector has already soared. But today’s signal shows that the core high-position sector, like Litong Electronics, gave a -9 deep water position when breaking through 4200 with volume. Although it closed in the shallow water zone, this signal feels off. Also, the core storage stock Shengshi Technology performed weakly today. The index breaking through these core tech high positions without positive feedback is unusual. So, it’s better to avoid high-position core stocks and instead focus on stocks with strong positions and high popularity.

Market Sentiment:
The All A-share index on Tonghuashun has had six consecutive bullish days, but the yellow line has been below the white line for several days, with almost no divergence. Jintanglang also closed with a bullish candle at a new high. Limit-downs are 3, and large retracements are 5, which are not recent hot spots, so overall sentiment remains healthy.

Hot Sector Analysis:

Communications: Optical modules, fiber optics, printed circuit boards

Computing Power: Liquid cooling, data centers

Storage: Shenzhen Huaqiang

Electronic Gases: Baoguang Co.

Semiconductor Equipment: Yujing Co.

Optical Modules: Taijing Technology, Guangxun Technology

Fiber Optic Concept: Tongding Interconnection

Printed Circuit Boards: Hongban Technology

Liquid Cooling: Sun Yang Co.

Data Centers: Fuda Alloy

Virus Prevention: Daan Gene

Robotics: Fuchun Dyeing & Weaving

Lithium Batteries: Chengxing Co.

Chemical Industry: Shandong Glass Fiber

Securities: Jinlong Co.

The index is breaking upward, but focus should remain on technology, chips, communications, and computing power. When high positions in tech sectors stagnate, look at low positions. Other sectors should only be considered if they are core. The current clear signal is technology, and the main line has been set. Don’t miss the great opportunity in the main line or easily lose core tech chips.

Summary:
The index has broken through the left-side resistance at 4200, turning it into a strong support. The May market is worth looking forward to—this is the start of a bull market. If the index pulls back later, it’s just a chance to re-enter. Don’t throw it away like waste paper. The upward driver is technology: chips, communications, and computing power. Based on today’s market, with Li Tong Electronics and Shengshi Technology performing well, high-position tech stocks are stagnating. Focus on high-strength, popular stocks, such as Tongding Interconnection, which we’ve been highlighting for days and which has now surged with continuous boards. If you’re not in yet, don’t chase; look for lower levels, such as today’s first-board stocks with high tech strength and recognition. The market currently has ample liquidity, so consider large-cap stocks.

A question for everyone:
Among the tech fiber Tongding Interconnection, the optical module Taijing Technology, the printed circuit board Hongban Technology, and the data center Fuda Alloy, who do you like most? Feel free to share your insights—I’ll join the discussion, and we can exchange ideas.

What is the right short-term path? Perhaps keep it simple: forget about all those so-called strategies, tactics, and indicators. Trading for us is really just solving three questions: buy or not? what to buy? when to buy and sell? Are these not the questions we think about every day? Thanks to my master, I’ve been fortunate to learn from some other big players. The trading systems of those we once admired are actually not complicated but very direct and effective. So I’d like to share my trading system here, and I believe everyone will gradually realize what the right path truly is!

The core of Zhuque Road’s system is only five words:
Trend (decides whether to buy or not)
Hotspot (decides what to buy)
Rhythm (decides when to buy and sell)

Trend: What is trend? It’s not the red or green of candlesticks, nor the golden or death cross of indicators, but the consensus direction of funds, the trajectory of sentiment flow, and the resonance of fundamentals and policies. Trend is the ultimate carrier of all trading logic.

Hotspot: Once the trend’s direction is clear, we no longer blindly follow the market. When the wind is favorable, where should we aim our bullets? The answer is hotspots. Hotspots are the three-dimensional presentation of fund consensus because the essence of the stock market is fund-driven, and hotspots are the strongest magnets for attracting funds. Retail investors who don’t understand hotspots will always be paying for others’ bull markets. In A-shares, never waste too much time and funds on non-mainline stocks. Ninety percent of your profits will come from participating in hotspots.

Rhythm: Rhythm is the top art in trading. It doesn’t teach you what to buy but answers the question every trader has: when to enter? when to exit? If trend is the timing, hotspots are the terrain, then rhythm is the harmony—when all three are aligned, success is assured. It’s about your mastery of trading rhythm.

Thanks to the strong players @Zizai Jin, @Long Gonglong, @Trading Little Machine, @Yang Yangtai, @Guan Guan111, @Guzhou Du, @Xiangzhang Wang, @Shadi Huasheng, @Wealth Cannot Keep Up With Age, @Not Troubled by Love, @Michelangelo, @Xiao Sha Sifang, @Kaka Senior, @Under the Big Banyan Tree, @Emotion Decides Everything for Zhuque Road’s support points!

Thanks to @Jiu Kong Cheng, @Zizai Jin, @ZKNG, @Short Sniper, @Wu1997, @Feng Niu Ju Xu, @Bus Not Carry People, @Qian Niu Shang Shan Da Lao Hu, @Jisha Zhenhai, @Trading Little Machine for 8 valuable support coupons, elevating Zhuque Road’s articles to treasured highlights on Taoxian!

Sincerely wishing all brothers supporting Zhuque Road: continuous limit-ups! Long live the stock market! Wishing you prosperity!