At the current moment, should we rotate from high to low, or stay in tech? Where is the answer?

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On Friday, A-shares oscillated and recovered on shrinking volume. From the market landscape, we can see that funds rotated from high-position tech stocks to low-position ones, with robotics and commercial aerospace leading the gains. Tech stocks recovered but then rose and fell back.
We mentioned earlier in the comments of our previous article that optical fiber and storage are both logic-plus-earnings plays, and the recent correction was a deliberate sell-off.
After optical fiber's final frenzied sprint last month, and following CCTV's report on explosive export earnings in optical fiber, the sector took a sharp dive—right before earnings were released. Storage was also suppressed by regulators, preventing earnings from being announced, while big money actively cooled the market, knocking storage and optical fiber from their highs.
The news everyone received was surging demand for optical fiber and optical modules, which also sustained everyone's courage to keep bottom-fishing and holding the line. Over seven days, some core stocks showed signs of stabilizing on the final day.

Optical fiber leader Yangtze Optical Fibre (YOF) has dropped 20% from its peak and stabilized at the 30-day moving average.

Hengtong's view couldn't hold the 30-day line on Friday, continuing to seek support at the 60-day line.

Zhongtian Technology broke below the 30-day line.
Among the three core players, only YOF has held the 30-day line. The market pulled down prices before the interim reports, so after the reports, market sentiment will likely get a pulse boost.
Over the weekend, Hangzhou Cable (Hangdian) was the first to release its earnings forecast, a massive 900% increase.

Hangdian stabilized near the 30-day line after adjusting.
So it's fair to say optical fiber has essentially bottomed out. Next week, as long as YOF holds steady and Hengtong and Zhongtian hold the 30-day line, and as optical fiber earnings are gradually disclosed, this will be a golden pit. But a reminder: the strongest scenario might be a double top.

Now let's look at the storage line. Here too, it's a earnings➕logic play! Earlier, regulators suppressed storage earnings, afraid they'd get out of control. Now Jiang Bo Long has released earnings—700 times... That's why I've been saying over the past couple of days that this was also a premeditated decline.

Jiang Bo Long pulled back to the 30-day line on Friday, stabilizing and showing a short-term signal. The recent rise in storage hasn't been as steep as optical fiber, so there's also an expectation of a double top.

GigaDevice (Megui Innovation), the core leader of this wave, recovered without even touching the 20-day line. The line is very steep, and we'll continue to watch its performance for storage going forward.

De Ming Li is even stronger, stabilizing at the 13-day line and reversing with a big bullish candle on Friday. Its earnings will likely be explosive too.
There are many more; I won't list them all.
Optical fiber + storage are both earnings-plus-logic directions, and they are solid sectors. But we need to note the sustainability after earnings are announced. Most likely, it will just be a pulse. This month, SK Hynix and Samsung will also release their earnings. Micron's earnings came out earlier; we can take a look at Micron's price action.

You can see that before Micron's earnings, the market experienced a sell-off. Here, before our earnings, storage and optical fiber also went through a sell-off.
On the day of Micron's earnings announcement, Micron surged for one day, then started a downtrend. Although there was a long lower shadow later suggesting a possible stabilization, Meta then spread a ghost story. No matter how good the earnings, ghost stories still scare people. For high-position tech stocks, any slight disturbance triggers panic, and everyone fears being the last to hold the bag.
Here, we tend to follow Korea more closely, and we lack a truly strong leading company of our own. Once ChangXin Memory goes public, we should have a backbone.

The point here is to tell everyone: after high-position tech stocks release earnings, you must observe the sustainability of capital. High and low positions are like a seesaw. On Friday, capital clearly rotated from high to low. After the weekend earnings announcements, many people will likely want to return to tech, regretting they cut losses at the bottom. That kind of mentality is easily exploited. We should always think counter-cyclically! Be anti-human nature! Don't the big money know that storage and optical fiber earnings are good? It's very obvious—everyone knows. Optical fiber and storage have already risen tenfold before central media started reporting; they barely reported before. In the past, it was all small articles. Everyone knows that. A lot of capital is about to temporarily exit here. When all retail investors realize this massive wealth is coming, the heartbreaking result is it's already tenfold. When central media reported that Huagong Technology's optical modules shipped 100 times, Huagong Technology hit its limit-up the same day, surged the next day, then started trapping people on the third and fourth days.
Tech remains the main line; I am not bearish on tech. But going forward, our focus will be on the sustainability of AI hardware and the persistence of low-position tech. The battle between these two will be the key for the next seven months. For example, Monday's strategy is to gauge the strength of Jiang Bo Long and then trade others accordingly, rather than directly buying Jiang Bo Long at a high. Keep one extra eye here for a short-term double-top bounce.

These are some personal views on storage and optical fiber. Just one person's opinion. Take it with a grain of salt! The market is not predicted; it unfolds. We just follow it!

Back to Friday's market
The script of A-shares rising on shrinking volume played out again. The next act may be a volume-driven decline. Especially on Monday, with earnings catalysts, retail investors will be enthusiastic and rush back into tech.

As usual, check the morning market:

First, thanks to all the friends who have been tipping and liking my morning market posts. Your support is my motivation to keep updating!
The more active everyone is, the more accurate the morning market will be. The force is mutual!
Special thanks to Bro Jin, Bro Xinghuo, Bro Shenxian, and Bro Gusu Feng for sealing the board! Let's encourage each other!

Daily notes:

1. The market was unclear before the session. I believe defense is offense; waiting for the right moment is what's most needed at this stage.
2. The previous phase highs were hyped by official media. Now the decline is already 20-30 points. The underlying logic of A-shares is capital-driven; news serves capital. The news makes everyone feel that buying any time is right, but in reality, the price kept breaking down.
3. Tech's decline is not a bad thing. If tech had remained at high levels with earnings stacking, that would be a risk. A decline with positive news is good. A rise with good news is a sell opportunity.
4. I advised everyone not to blindly bottom-fish. You can pick up core stocks at lows, but if they aren't core, they may just keep falling. Core stocks can rely on earnings to support a second high (double top), but pure sentiment stocks won't recover. Be careful not to fall into habitual thinking.
5. On Friday, the comment section was quite clear. Operationally, we made adjustments. As tech started correcting, we could look for low-position sectors for short-term rotation. Note: this is not switching to low-position for the long haul, just rotation. The main line should still be tech; it's just a matter of when tech stabilizes.

Direction One on the day: Apple foldable screens volume increase. Actually, these also overlap with humanoid robots partially.
For example, core stocks to watch: Lens Technology, Lingyi iTech.
Furong Technology opened and sealed instantly; Yi'an Technology also showed some action.
But this direction is clearly weak; just observe.

Direction Two on the day: Robotics. This differs from Direction One and triggered entry conditions.
First, Unitree's catalyst. We need to watch Unitree's shareholding parties. If there's movement, it's worth extra attention.
At open, Shoukai (First Opening) had a one-character limit-up, triggering condition one. Leishen Intelligent extended its strength, triggering condition two.
Then Kingfa Science & Technology, Wolong Electric Drive became arbitrage plays, both hitting limit-ups.

Combined with my Thursday morning market, where Direction One was also robotics. If you got a first-mover position in robotics on Thursday, Friday was very comfortable!
And Thursday's robot catalyst wasn't Unitree, but Tesla's mass production news. So the core was different.
First, Estun Automation's pattern: it was catalyzed by physical AI, top in industrial robot shipments—solid logic. In terms of pattern, it had a previous streak of limit-ups, giving it recognition. So it's a core stock deserving special attention. I took a first-mover position on Thursday at a low.
As for Tesla's Sanhua Intelligent Controls, Wolong, Tuopu, Leaderdrive—if you bought them on Thursday, they all had big bullish candles on Friday, even sealing the board.
Observation targets: Wuzhou Xinchun had a big bullish candle on Friday; Zhaowei Electromechanical and Zhejiang Rongtai sealed the board.
Sometimes the morning market's thinking is ahead of the market. That gives us an advantage, helping us find a safe haven a day early.

AI Application Direction Three:
Obviously, Kunlun Wanwei couldn't extend its strength. Capital flowed into commercial aerospace and robotics at open, confirming that Kunlun is weak—this direction can be ignored.
And observation target Tianyu Digital opened and surrendered, also indicating the board lost significance.

Summary: On the day, tech stocks hit another low, and most stocks experienced a rally and then a pullback again. This is another moment to reduce positions or exit. Especially for sentiment stocks and those without earnings support, it's a signal to exit. But yesterday, many probably still rushed in and bought at highs. That's a timing issue. Going forward, even if tech has a rally, it will favor stocks with solid logic and strong interim reports. Avoid stray stocks.
Specifically, glass substrates and MLCC currently probably won't have earnings in the interim. MLCC earnings might come in the third quarter report. Glass substrates have almost no earnings. So during this interim season, you can focus on the already-corrected optical fiber and storage.

Position plan for the day:
Dier Laser: I bought Dier Laser on Thursday at a low, still down 2%. On Friday, I told everyone not to panic. When it tried to go above the zero axis without strength, mainly dragged by BOE, I signaled to exit.
Not losing money that day was decent.
Kunlun Wanwei: I didn't exit during the surge, ended up exiting at -5%. This deserves reflection—it shouldn't have happened. It was just an arbitrage, but it turned into a loss.
Taiji Industrial: I advised not to cut at the lowest point. I myself exited at -1%, and then it rallied another 6-7 points. Taiji is a core accumulation stock; my operation on this stock over the past two days has been poor—the range is too large, hard to grasp.
Estun Automation: I didn't write it on Thursday since I couldn't trade then. It sealed on that day. I'll hold.
New positions:
Zhongda Leader (Zhongda Lide): Bought at the limit-up.
Keli Sensing (Keli Chuangan): Bought at 8%+. It's a laggard, got smashed. Normal—acceptable, since I was going for arbitrage. The stock's logic is decent, and its pattern is not a rebound from lows but a breakout.
Founder (Chuang Shiji): Consolidating at highs. I bought at 2.5% for a first-mover position.
Xiaocheng Technology: Took a small position in gold as a defense; this trade is optional.

Summary: I took mostly robotics positions that day. Robotics should not be viewed as a primary uptrend here; it's just rotation. Most stocks are run by quant funds; they look exciting. Monday will show if there's continuity, perhaps a small cycle transition.

Easter egg of the day:

Half of the egg: points that performed well were concentrated in the morning's robotics direction.

Yesterday in the comment section, I analyzed the two types of market participants: one group stubbornly holds tech and buys dips; the other tries low-position arbitrage.
On Friday, the low-position arbitrage group outperformed the tech bottom-fishers. On Monday, the earnings-driven group might outperform the low-position arbitrage group.
Neither approach is wrong—they are both mainstream market capital flows. No direction is definitely right, but pay attention to the rules!

1. For those firmly bullish on tech: focus on stocks with logic and earnings to buy dips. For example, optical fiber's Yangtze Optical Fibre, Hengtong; storage's Jiang Bo Long, Beijing Junzheng, De Ming Li, Xiangnong Xinchuang, etc. But pay attention to dip-buying levels. Since some earnings have set a precedent, others are likely determined too. Use the performance of stocks that have already reported as an anchor to ambush stocks that haven't reported but may have big earnings surprises.
2. For those trying low-position directions: focus on the front-row recognition of sector leaders. Robotics direction: Estun, Sanhua, Shoukai, Wolong.
   Commercial aerospace: Chengchang Technology, China Satellite, etc. Now it's not about SPX chain but the domestic reusable rocket theme. Everyone should distinguish clearly.

Sector-wise, the strongest on the day—no doubt—was robotics.
Everyone, pay attention to the rhythm; focus on the core, the rest are laggards. The massive limit-up craze is driven by quant funds. And now even first-board stocks have started issuing clarification notices. So we're now trading on the quality of the stock. Keep an eye out.

Commercial aerospace is similar. Except for Chengchang, most other limit-up stocks are riding on the concept.
So just focus on Chengchang Technology.
Plus the bottom solid logic: China Satellite, Aerospace Power, Aerospace Electronics, etc. But this direction is clearly weaker than robotics.

Not much else to discuss. Monday's highlight will be robotics: weak to strong, plus a partial recovery in logic + earnings lines. Stay away from directions without earnings support to avoid getting hurt!

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