Review on May 14

The following operations are solely for my personal record use, with significant risks. Do not follow the trend.

Today’s operations

Morning session

Continuing the pattern of Strait Innovation

Sold high on Great Enterprise shares

Bought Baoguang shares with half the position on breakout and re-entry

Afternoon

Sold Strait Innovation on a high

Current holdings

Half in Baoguang shares

Half in cash

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Index sentiment

The index opened at a new high, then rose sharply and fell back, with a rebound in the afternoon, but continued to decline at the close, ending with a long dark candle with a head and tail. Turnover was 3.39 trillion yuan, maintaining a volume level above 3 trillion yuan.

In terms of pattern, the index formed a large bullish engulfing candle yesterday, and a large bearish engulfing candle today, creating a yin-yang crossing pattern. The short-term upward momentum has halted; after reaching a new high, a correction is needed. In the short term, focus on the support of the 10-day moving average.

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Data summary

1. Limit-up stocks: 54, the number of limit-ups has dropped to a low-medium level, compared to yesterday (112), the limit-up count has been halved.

Limit-up trend: 97-92-57-112-54, limit-up count halved again.

Indicator explanation: below 50 is low, 50-90 mid-range, above 90 high.

2. Consecutive limit-up days: 18-19-17-17-16, the number remains near high levels.

Indicator explanation: below 10 is low, 10-20 mid, above 20 high.

3. Limit-down stocks: 16, the number of limit-downs has returned to a high level, continuing to rise significantly compared to yesterday (1).

Limit-down trend: 1-3-7-1-16, rapid increase in limit-down stocks.

Indicator explanation: below 3 is low, 3-6 mid, above 6 high.

4. Limit-up board sealing rate: 65%

Trend: 85%-73%-71%-82%-65%, sealing rate has fallen to a low level.

Indicator explanation: below 70% is low, 70%-80% mid, above 80% high.

5. Number of advancing and declining stocks: 1047:4387, the number of advancing stocks has sharply decreased, indicating a sentiment freeze.

Trend: 3637-3121-1378-3215-1047.

Indicator explanation: if the declining stocks are above 4000, it’s low; if the advancing stocks are above 4000, it’s high.

6. Market height: 4-5-5-6-5, a day of space and breakage.

7. Data analysis

The index formed a large bearish engulfing candle after a large bullish candle yesterday, combined with the break of the leading stocks, causing market sentiment to fall rapidly and losses to expand. Currently, all are in a retracement phase, with a trend of sentiment retreat. Be cautious of risks.

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Market main line: None

Sub-line hot spots: Power

Intraday hot spots: Power, computing power, chips, photovoltaics, optical communication

Leading stocks with consecutive limit-ups: None

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Market nodes:

Four limit-up: High volume breakout + large bullish new high day (switch)

Three limit-up: Fuda Alloy breakout with high volume and break of limit-up (switch)

Two limit-up: Large bullish engulfing + Datang reduced volume and broke six limit-up days (pseudo-rally, false breakout)

First limit-up: Datang + Hualiao breakout with high volume and break of limit-up day (switch)

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Today’s limit-up break and reversal:

None

Yesterday’s limit-up break and reversal:

None

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Sentiment cycle analysis

Long-term position: Rotation cycle transitioning to a new cycle

Short-term position: Tidal retreat phase

Loss effect: Large

Cycle height: Generally micro

Breakthrough leader: Suspected to be micro

Potential breakthrough leader: ————

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Market observation

1. Sentiment retreat

The leading stocks with consecutive limit-ups, Datang and Hualiao, both experienced high volume breakouts and were halted, combined with a sharp decline in the index, indicating a retreat phase. The pattern shows Datang closed with a high-volume gap-up and a large bearish candle, ending green, which is quite unfavorable. The market also saw 16 stocks hit the limit-down, indicating a short-term sentiment downturn.

Yesterday’s bullish candle was a key point, with a large bullish move plus Datang’s acceleration, forming a pseudo-rally. But today’s large bearish candle and Datang’s halt feedback suggest yesterday’s pseudo-rally may be invalidated, and today marks a switch in thematic focus.

2. Cycle anchoring

Whether the microchip sector is breaking out is uncertain, as there’s no precedent for a new stock sentiment breakout (I haven’t seen one). Also, Fuda Alloy and Tongguan Copper Foil, which broke the 10-day moving average yesterday, showed clear negative feedback, indicating failure of the breakout.

Meanwhile, the market’s expected talks between leaders have not produced any surprising news, and funds have taken profits today. Without confirmation of a breakout leader or new themes, the new cycle will be delayed.

Currently, the trend of Hualiao as a representative of the trend-holding group needs to be observed through tomorrow’s market feedback.

3. Microchip sector

Assuming the microchip sector is the breakout leader, including storage chips, AI computing power, and Shenzhen local stocks. If so, after this wave of power sector retreat, chips may see a crossing rally.

Today is the first limit-up node, so stock selection can focus on themes related to crossing sectors. As for new themes, confirmation depends on tomorrow’s talks.

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Personal holdings

1. Strait Innovation

Initially just a waiting position; no decline in the morning, mainly watching for unexpected news from the talks. After the news at midday, the rally was weaker than expected, so I sold to realize gains.

2. Great Enterprise shares

Yesterday’s performance was below expectations; today’s plan was to rally and then realize gains, so the first wave in the morning didn’t hit the limit-up, and I sold directly.

3. Baoguang shares

One breakout trade, one re-entry for re-accumulation, then a volume breakout with an immediate fill, no time to cancel orders.

Mainly two expectations: one based on technical pattern, a second on chip-related anticipation. The morning’s chip fermentation was quite good; it also actively hit the board, and the re-entrance was decisive.

Today’s halt was likely following the power sector; the trend pattern still holds, with some hope for a rebound. Try to cut losses tomorrow.

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Yesterday’s trading plan review

No plan.

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Tomorrow’s trading plan

Today suffered a big setback; expect a rest day tomorrow. Also, the chip sector remains trend-based, making it difficult to do consecutive limit-up plays, so I won’t make a plan.

Generally, after a significant pullback, it’s best to pause to avoid disrupting the rhythm and increasing losses.

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Disclaimer

The above stocks are not recommendations; for review purposes only. Make your own trading decisions and bear the risks!

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