Performance is the foundation, themes are the wings, and low prices are the base.

The mid-July earnings season is officially underway, [Taoguba]

Coinciding with a vacuum period in market themes,

The market's speculative path is clear,

**Performance + **

It can be roughly divided into three layers of logic.

1. Performance as the foundation.

Performance is fundamental; all speculation cannot bypass it. Stocks that only hype concepts without performance support tend to see sharp declines during the disclosure period. Only with improving profitability can stock prices have long-term support.

Example: Envicool in Q1 report.

Here, we must distinguish between genuine and fake performance growth. Make a comprehensive judgment based on performance expectations, P/E ratio, and sector valuation to verify the quality of performance:

Genuine performance growth:

Profit is driven by core business, with revenue and net profit expanding simultaneously. Growth is sustainable, performance significantly exceeds expectations, valuation is below industry average, and there is room for recovery.

Fake performance growth:

Profit relies on selling assets, one-off subsidies, foreign exchange gains, low base effects, and other non-recurring income. Core business has not improved, growth is unsustainable, and financial reports are prone to sudden reversals.

Two core points to judge:

1. Look at the source of growth: Main business revenue growth is genuine; one-off gains are fake.

2. Look at valuation expectations: Only when performance exceeds expectations and valuation is below the sector average is there value for positioning.

2. Themes as wings.

Good performance meeting a hot trend is like putting wings on something. Only then can the upside potential be unleashed. It is like icing on the cake, adding strength to strength.

Example: Positive—Leadshine Technology is currently being speculated on for robots, and Leadshine's earnings growth is due to the volume of orders for humanoid robot components.

Negative—YTO Express and Shao Energy Co., their performance is good, but the themes are not. They are not the current speculative hotspots, so they won't go far.

3. Low positions as the foundation.

Most stocks at high positions have already priced in positives in advance, and when the mid-year report is released, funds tend to exit easily.

Example: Guanggang Gases. A low-position stock that hasn't been heavily speculated offers higher safety margins. Once the mid-year report exceeds expectations, valuation recovery coupled with a strong theme provides maximum cost-effectiveness.

In summary, during the mid-year report window, only when all three factors are present will a stock be poised for a sharp upside.

$1
Review for July 3

On Friday, I only watched the morning session,

After the close, I took a brief look. If there are any omissions, I will add them later.

1. Early morning auction

The strongest was performance growth: StarNet Communications. After the auction, it still had 1.4 billion in order volume.

Robots were not strong in the auction; after the open, funds were also hesitant.

After the auction, Leadshine's order volume was only 230 million. Shouka's order volume was only 360 million, and Jingxing was one tick away from the limit up.

ZhongDa Lide opened +4.8%, Estun Automation opened +3.2%. Both mid-cap stocks hit a peak and then pulled back.

The real turning point that made funds resolutely go long on robots again was Do-Fluoride's limit down.

Do-Fluoride, as the last remaining branch of semiconductors, performed below expectations.

Do-Fluoride hitting the limit down also indicated that funds had completely given up.

As mentioned earlier, in a market of 3.5 trillion, short-term active funds exiting semiconductors will surely find another sector that can absorb them.

It was also mentioned that Friday was a good opportunity for robots. So on Friday, it was the classic "while you are sick, I will take your life."

2. Several highlights in large tech:

BOE Technology

Opened low and went lower, consistent with the previous forecast. Pre-market, I also mentioned that BOE's strength was not due to market consensus but to news stimulus. Over the weekend, there was negative news about glass substrates. BOE will face a big test on Monday.

Wuxi Taiji Industry

Opened and was hit with a limit down. During the auction, it showed a weak-to-strong reversal. Intraday, it was boosted by the strength of Korean stocks, indicating that funds have not completely given up on semiconductors and want to keep the baton in storage. When Taiji rose, Zhongda and Estun opened briefly but quickly returned to the limit up, showing that funds are resolutely going long on robots here.

3. Robots

Without a doubt, the protagonist today.

If metals are stable and innovative drugs are hot, then robots on Friday were fierce.

Whether in terms of position, forward players, mid-cap stocks, or brand recognition, everything is fully committed.

In the afternoon, Sanhua and Wanxiang both hit the limit up.

Moreover, the tier structure has been established here.

In the previous post, I wrote about how to determine if a theme is the current main line:

Key criteria:

1. Is the logic solid?

2. Are the funds strong?

3. Does it persist for a long time?

4. Is the sector complete?

5. Does it lead sentiment?

The more criteria a theme meets, the closer it is to being the true main line.

A main-line sector can accommodate all types of model capital: limit-up chasing, relay, second waves, ultra-short, trend, low-entry.

4. Innovative drugs

As written before the market, this sector only has height, not width.

Once a main line emerges in the market, it will be eliminated immediately. I won't be watching it anymore.

5. Gold

Logic for the rise:

a. The US June non-farm payroll data was a huge miss, completely cooling expectations for Fed rate hikes.

b. Both the US dollar and US bond yields fell, doubly benefiting international gold prices, which were oversold.

c. Technically, oversold. Second strongest, a strong side line. Treat it as arbitrage, a transition play.

6. AI applications

There was negative news before the market—Zuckerberg said AI agents are useless. Over the weekend, Doubao and Qianwen AI agent features were taken down. This sector is written off; it might be blacklisted for a long time.

Summary:

The semiconductor sector within large tech still has sparks, but it wasn't strong on Friday. The stocks that were strong were those maintained by institutional investors: PCB and storage.

The behavior of large tech semiconductors on Friday fits the typical characteristics of a major main line undergoing a large-cycle decline or end.

In a 3.5 trillion market, a decline won't clean out everything at once.

The transition from tech to performance growth is logically smooth.

After all, it's a 3.5 trillion market.

Robots look the most like the main line. Why do I say "most like" instead of "confirmed main line"? Check the five characteristics above and see.

However, robots on Friday were nearly climaxed. The day after a climax, Monday must not be mindless.

Several points to watch on Monday:

1. Can the core rotation stocks of robots withstand the divergence and continue to hold up?

2. What is the market's attitude towards Jiangbo Long (storage + performance growth)? Is it a hard push, a high-open high-go, or a sell-off on good news? This will directly affect the recovery of large tech semiconductors.

3. Can the recovery of stocks like Taiji and Shenzhen Tech within the tech sector continue to retain funds?

Among these, I will focus on robots. From a sudden start to a climax on Friday.

Robots on Monday will definitely face significant divergence. If the front runners become available, it will still be a buying point.

A new cycle is never shouted into existence; it emerges from divergence. And stocks that can withstand divergence are the ones most worth your attention.

Out and about, taking time to write this post is not easy.

Like, upvote, tip 100 points, let's go.

I will reply to the comments on the previous post one by one later.

Here, we see market preferences, align with market preferences, and hold market preferences.

My screen setup: https://www.tgb.cn/a/2qLIwyotIJv
The secret of position management: https://www.tgb.cn/a/2ppda16qt1d
How to identify main-line themes: https://www.tgb.cn/a/2sZJJSbCXUJ
Ineffective trading in the stock market: https://www.tgb.cn/a/2sAJ5CXXxgo
All rules of node and catch-up: https://www.tgb.cn/a/2qKoJ57oamV
Stock market cycles are like dynastic changes: https://www.tgb.cn/a/2r5vKHCyLTP