[Red Envelope] 5.13 Preview: The tide withdrawal effect is emerging! Pay attention to the rhythm in the second half of the week! Look here for tomorrow's direction!

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A five-minute review of today’s market:

In the morning preview, I clearly pointed out the electric grid and power sector, saying there was rotation expected at this position. Today, everyone should have seen it— the electric grid equipment sector rose 1.48%, Tongguang Cable jumped 20cm, Wankong Intelligent Manufacturing and Hanlan Co., Ltd. both hit the daily limit, and Datang Power topped out with 5 consecutive limit-ups. This is an inevitable result of capital switching. On one hand, yesterday’s index led the rise, today it shifted to consolidation, after continuous big gains, there’s a need for pullback and risk aversion. Meanwhile, rare earths and aerospace diverged sharply today, active funds need an exit, and the summer electricity peak catalyzed and safe-haven attributes made the power sector the natural first choice during this transition period. But pay attention to a detail: today, 8 stocks in the power grid equipment sector hit the limit, but many only started their rally in the afternoon. This kind of late-day sneak attack pattern likely means tomorrow’s early trading will face profit-taking pressure.
For ultra-short-term trading, watch Datang Power as a barometer. If it can withstand divergence, then the later stocks still have room to hold. If it breaks the limit with high volume, then caution is needed for the power sector!

Let’s talk about today’s strongest sector—semiconductors. Core Micro surged 15 points, Jing Sheng Co. approached 9 points, with net inflow of 276 million yuan, making it one of the few resilient sectors today. Here’s a detail: today, only Cambrian and China Great Wall showed proactive moves; these two did not follow external logic but were driven by institutional funds themselves.
In storage chips, Korea’s index rose 5 points, but Japan’s was less than 1 point. A-shares’ storage chip bidding opened best, but the gains during the session were weak because of too many follow-on traders and few active buyers. Doing passive sector trading like this is extremely low in cost-effectiveness. If you didn’t get in during the bidding today, chasing high during the session will likely get you trapped. After Intel’s adjustment tonight, this side will open lower.

Optical communication modules look strong today. Zhongji Xuchuang broke through 1000 during the session, but the entire sector net outflow was 33k yuan. Chuan Technology hit the first limit-up, Tongding Interconnection hit 4 consecutive limits, but the order book for these stocks isn’t large. Except for Zhongji Xuchuang and a few leaders, the backbenchers are quietly offloading.
This indicates that funds are grouping in the front ranks, while the back ranks are starting to fall behind. Did Brother Zhuang mention this in his morning outlook? Here’s a pro tip: when sector indices rise but net funds flow out significantly, divergence often appears the next day. If Long Yi can hold, then Long Er and Long San are more likely to fall behind. Tomorrow, optical modules should only be watched for two signals: one, whether Zhongji Xuchuang can stay above 1000 yuan and turn over; two, whether Tongding Interconnection can continue to turn over and advance. Missing either one means the sector will enter a big divergence!

Finally, let’s talk about tomorrow’s strategy. The index is between the 5-day and 10-day moving averages, with a turnover of 3.3 trillion yuan. This volume is enough to support rotation, but not a broad rally. Today’s strongest sectors—semiconductor equipment and optical communication modules—are likely to diverge tomorrow, with funds flowing back into sectors that corrected today and have logical support. For sectors like commercial aerospace and innovative medicine, if they open slightly lower or flat tomorrow, observe high-visibility stocks. Overall, tomorrow’s early trading will still be opportunity-driven, with rotation markets requiring good rhythm!

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End of review, start of recap!
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1. Index and Market Trend Analysis**

The morning started declining from a high of 4229.28, completing a 5-wave decline, ultimately reaching the day’s low of 4199.34. The main decline wave 3 dropped from 4222.15 to 4199.34, a single wave down of 22.81 points, the most concentrated selling phase of the day. Waves 1 and 5 declined by 23.68 and 12.66 points respectively. The overall 3-wave structure is longest, with waves 1 and 5 symmetrical. The yellow line (small-cap stocks) fell more sharply than the white line (large-cap stocks), indicating that the selling momentum mainly came from thematic stocks.

After the bottom, the index entered an A-B-C correction. Wave A quickly rebounded from 4199.34 to 4212.00, a 12.66-point rally. Wave B oscillated narrowly between 4210-4215. Wave C slowly lifted to close at 4214.49, with only a 0.25% overall decline. However, during the rebound, many funds exited, and the intraday volume did not show significant increase, indicating this was a technical correction after decline, not a trend reversal. The key will be whether it can break through the morning high of 4230.18.

2. Market sentiment quantification and tone-setting today:

From Zhuang’s trading system perspective (original across the entire network, if similar, it’s just imitation!),
Today’s trading position: 30%, defined as divergence (since the system’s creation, it has accurately predicted entry and exit points 2,306 times).

Core market data today:
Number of advancing/declining stocks: 1379 / 4048
Number of limit-up stocks: 94
Number of limit-down stocks: 32
Total market turnover: 32.7 trillion yuan, down 295.7 billion from the previous day (-8.29%)
Main force net inflow: -122.13 billion yuan
Yesterday’s limit-up performance: 2.06%

Using the system to characterize the market in one sentence: Today was a broad decline under weight support, with the index slightly down but widespread weakness in individual stocks, and market sentiment clearly cooling.

3. Analysis of stocks and sectors with consecutive limits:

Power/Green Energy (13 limit-ups)

Five-limit:

Datang Power: Turnover upgrade, with fermentation and high premium expectations, tomorrow needs divergence test.

Two-limit:

Hua Dian Liaoning: Sneak attack at the close, mostly arbitrage, the sector may trend if it doesn’t fall apart.

First limit: Shao Neng Co., Gongda Keya, Wankong Intelligent Manufacturing, Zhezhong Co., Solar Cables, Solar Energy, Jin Kuo Electric, Hanlan Co., Ltd., Dalian Electric Porcelain, Tongda Co., Ltd., Dalian Thermal Power.

Sector analysis:

Today, power was the strongest main line across the board, no doubt. In a market with broad declines and collective capital outflow, only this sector formed a complete echelon. The 5-limit high was held by Datang Power, with the divergence tested. Hua Dian Liaoning followed with support. Eleven stocks hit the first limit, covering the entire industry chain from power grid equipment, UHV, green energy operation, to energy storage, almost revitalizing the whole industry chain.

The power sector is supported by logical factors:
One, the “14th Five-Year Plan” policies for grid investment catalyzed by the government;
Two, increased electricity demand in summer.
Fundamentally, it’s a combination of safe-haven and offensive attributes.

But also note, today’s strength was more due to passive grouping against the market decline. Overall, volume shrank, and funds flowed out, making sustained expansion unlikely. The key is whether Datang Power can hold the divergence. If it breaks the limit, the entire sector’s follow-up stocks will likely be emotionally driven and collapse, reducing the cost-effectiveness of the rally.

2. Semiconductor industry chain (10 limit-ups)

Three-limit: Kangxin New Materials

Two-limit: Hanbang Gaoke, Haio Co., Shangfeng Cement, Yellow River Cyclone, etc.

First limit: Zhonghe Technology, Jinhai Tong, Huayuan Holdings, Taiji Industry, Kuaike Intelligent, Yunnan Germanium.

Sector analysis:

Today, the semiconductor sector pulled high then retreated, with equipment stocks relatively strong. Core Micro surged 15%, storage chips rose about 8%, but some follow-on stocks fell sharply at the close. Overall, volume increased but the index couldn’t hold new highs, indicating profit-taking pressure surged. Leading stock Lanku Technology traded 26.8 billion, Changdian Technology still attracted large funds, but many backbench stocks are being sold off.

3. Optical communication (8 limit-ups)

Four-limit: Tongding Interconnection

Two-limit: Yuan Dong Co.

First limit: Kechuan Technology, Zhejiang Zhongcheng, Tongguang Cable, Taihe New Materials, Quartz Co., Vico Technology.

Sector analysis:

Optical communication showed initial divergence today. Tongding Interconnection held at 4 limits, Yuan Dong followed with 2 limits, and six stocks hit the first limit. The echelon looks complete, but the strength is far less than power. Its logic is based on US stocks’ optical communication surge last night, plus Huang Renxun’s statement that next-generation AI infrastructure requires massive optical connections, so funds did a recovery on the news.

But the problem is clear: most follow-on stocks are low-priced rebound plays, lacking strong linkage, and with today’s poor market sentiment, the rise was more a pulse driven by news, with no sustained fund grouping. Although Tongding Interconnection hit 4 limits, its influence is weak, and subsequent stocks can’t keep up. This “strong leader, weak sector” structure means if the leader breaks the limit, follow-up stocks are likely to be wiped out quickly. Future opportunities depend on divergence among leaders; large sector rallies are unlikely for now, and beware of being dragged down by the leader.

Other sectors are rotating more, with no sector effect! No need to analyze further!
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Tomorrow’s candidates: Let’s unify the 888 likes tonight! More likes, and those with accounts in the green today can also tip some data!**
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4. Interactive thinking questions**

Finally, here are today’s thinking questions. No need to answer if you can’t, but feel free to leave your opinions in the comments, and I will answer them one by one!

1. When the first divergence appears, should the subsequent market focus on risk or opportunity?
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2. Despite broad decline, why do Zhongji Xuchuang and Cambrian still show positive signs or new highs?**

Six. One sentence to explain Brother Zhuang’s system (a must-see for new friends!)
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Zhuang’s trading system** is a self-created model used to quantify market sentiment cycles and convert them into position ratios, perfectly solving the effectiveness of sentiment cycle quantification in the era of quantitative trading!

Volume and power entanglement theory is a system for judging individual stock volume and price, helping with intraday buying and selling, and assessing main fund flows!

Ultra-short twelve methods include 12 ultra-short techniques, combined with Zhuang’s self-created volume-price theory, to solve stock selection issues.

In simple terms, the trading system manages positions, volume theory manages buy/sell decisions, and the twelve ultra-short methods handle stock picking. The three combined use the certainty of models to cope with market uncertainty, enabling survival!

Brother Zhuang’s journey hopes to help friends who are confused:
Special thanks to friends who encourage and tip!
@ThatTimeLittleWater @monkyin @BusNotCarryingPeople @lakecomo @LittleDirtPileGold @CtrlZzz456Little @FlyingDragonBuyInRisesImmediately
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Special thanks to friends who tipped!
@ZhouChen @zhangy @MyYellowUrineLetMeCome @OldHorseKnowsTheWay123456 @WuWeiNotReachingTower @lakecomo @TongTongLittlePrincess @MistakenlyThoughtBadBoy @cloudyseeker @EntwinedBranches @Autumn秋 @LittleDirtPileGold @BrotherDaoIsHere @BlueSeaTides2025 @ZhouJie @ThatTimeLittleWater @Michelangelo @IAmHanPaoPao @GreekMilk @MainRiseLeaderKongKongLong @HappyBrother164 @CtrlZzz456Little @LittleCute @SingStocksLikeLin @junjun1234 @ZhazhaFeng @ZhuangGeTalksStocks @ReturnToPureHeart @rxyl690 @EighthArrow @TimeWalking1688 @FloatingCloud0518mj @YingInTheMiddle @AFogWatchingFlowers @GuzhouCrossing @MrQ
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$Datang Power (sh601991)$ $Jin Tanglang (sz002081)$ $China Great Wall (sz000066)$ $Hua Dian Liaoning (sh600396)$ $Tongding Interconnection (sz002491)$
Thanks to every friend for your encouragement and tips. Your questions will be prioritized! You can also follow for first-hand analysis from Brother Zhuang!