July 9 Preview: How should you look at the market bottoming out and stabilizing? Huawei’s domestic substitution for computing power is the highlight!

**Good evening everyone, I guess most people lost money again today. Those who obediently sold at highs before 10 AM this morning are masters! First of all, everyone's understanding is different. Many are still chasing rises and cutting losses, and many are preparing to buy the dip. I have reminded you many times not to buy the dip, because any intraday bounce in the market is an opportunity for you to sell again at highs, let alone holding for the long term. Look back at the previous CPO and PCB bull stocks; those who held on are now down 40%. My personal long-term holding 'Hengtong Optic-Electric' I sold half last Friday, still not decisive enough, resulting in a profit drawdown of 40%. Although my cost is only over 20 yuan, the real decline is still nerve-wracking. So at the beginning, I repeat: the market and sectors have not stopped falling; before July 15, do not hold for the long term, and certainly do not blindly buy the dip. Today's article is very valuable; you don't need to ask every day whether the fall has stopped. I will give you indicators to distinguish what is a stop-fall, what is stabilization, and what is a reversal breakout. I hope you will gain a deep understanding of stop-fall and stabilization. Are stop-fall and stabilization the same concept? Today I have made a very vivid breakdown of stop-fall, stabilization, and breakout. Here again, let me summarize for the market, and I hope you will seriously comprehend and stop blindly buying the dip!! [淘股吧]

(The market index's second bottom-finding stop-fall and rebound, currently it is likely forming a W-bottom, the stop-fall signal has not appeared yet, wait for the signal again)

I. Overall situation of the index and market (The stop-fall of the market and most individual stocks has not arrived yet)

Today the market's morning session rallied, giving holders an excellent opportunity to sell at highs. Those who understand the rhythm basically cashed out and left in the morning. The overall market moved in line with Korean stocks, but A-shares were slightly more resilient. After opening higher, they weakened all the way, with all three major indices closing lower. Over 3,700 stocks fell, and the loss-making effect spread. The morning was fine, but in the afternoon the blond guy started another trouble, causing a global market co-sell-off, and oil rose again. Who is to blame?

The core conclusion is very clear: the market has no stop-fall signal at all, and the selling pressure on high-level sectors has not been cleared. Many retail investors cannot distinguish what constitutes stabilization and are rushing to buy the dip, essentially catching a falling knife. Judging a stop-fall does not require complex indicators; remember two points: no longer continuously making new lows, and the declining volume gradually shrinking. A confirmed long lower shadow bullish candle with volume or a massive bullish engulfing candle is needed. Missing one is not a bottom. At present, the support below the index has not stabilized. There is no clear bottom time and point in the short term, mainly stay on the sidelines.

(The index on July 9 will have a rebound, but the quality of the rebound may not be great. The J value of KDJ is already -7, indicating an oversold indicator.)

II. Sector theme divergence review:

Market themes are polarized. Only one sub-main line of Huawei computing power has emerged, and the rest of the sectors are all short-term rotation and catch-up declines.

1. Huawei computing power domestic substitution (the only highlight):
   The Huawei 950 super node conference on July 17 is a strong catalyst. Funds have pre-positioned in switches, servers, data centers, and cloud services sub-sectors. Targets like 'Star-Net Ruijie, Inspur Information, Unisplendour, YiDelong' continue to be explored by funds. Combined with domestic substitution + performance delivery, this line is the core highlight at low levels before the holiday. Computing power supporting semiconductors, equipment, and materials can all follow in repeated rotations.

2. Weakening rotation sectors:
   Robotics and pharmaceuticals only had a brief rebound and are now entering a catch-up decline phase; they should be quickly in and out, with no medium- to long-term trend. The previous high-level CPO and PCB have suffered severe declines. Stocks like Hengtong Optic-Electric and Tongding Interconnection have maximum drawdowns close to 40%. Many targets have broken below the 10-day line with declines over 30%. The decline speed has slowed but there is still no stop-fall pattern; the risk of bottom-fishing is extremely high.

3. Consecutive board expectations on July 9: (There are no consecutive boards to do now; the next-day premium is not significant, just take a look)

1. Continue to avoid high-level CPO, PCB, robotics, and pharmaceuticals. Do not guess bottoms, do not catch the falling knife early; wait for a clear stop-fall pattern before considering.
2. The main line only focuses on the Huawei computing power industry chain. Based on the expectations of the July 17 conference, do low-level sub-sectors, only do short-term arbitrage, do not heavy position for long-term holding.
3. Overall positions should be kept low. Before the index stabilizes, mainly take profits and stay on the sidelines. The morning rally is still a window to reduce positions; do not blindly add positions to bet on a rebound.

1 to 2: Star-Net Ruijie, Inspur Information, Zhuangyuan Ranch

2 to 3: Tianhai Electronics

Logic of gap-filling reversal (broken board reversal) and deep V reversal for Inspur Information

III. Judgment logic for individual stock stop-fall and stabilization

Simple criteria for stop-fall. For the market and individual stocks to stabilize, there are several patterns:

1. The market and sectors need to start stopping the fall.
2. Main patterns for candlestick stop-fall: massive bullish engulfing, strong bottom fracturing pattern, long lower shadow + doji, three red soldiers, etc.
3. Patterns for individual stock stabilization: After stabilization, the price does not make a new low below the stop-fall price; after a second confirmation without breaking the new low, it rises with volume (W-bottom, head and shoulders bottom / N-shaped pattern, box consolidation).
4. Stop-fall volume: The speed and amplitude of the continuous decline should become smaller and smaller.

(In March, Honghe Technology followed a head and shoulders bottom pattern, which can also be an N-shaped stabilization pattern.)

Tongding Interconnection also made a standard bottom fracturing and head and shoulders bottom pattern at low levels.

(Youyan New Materials this stock has a low-level doji with shrinking volume, strong bottom fracturing + N-shaped trend.)

(The stop-fall signals of the following three stocks are all achieved by massive bullish engulfing of bearish candles, and then stabilization through consolidation for washout.)

The overall market is now in a structural divergence scenario. High-level stocks are killing valuations, low-level themes rely on event catalysts. There is no broad rally. Wait patiently for multiple stop-fall signals from the market before increasing operations. At this stage, everyone must calm down, eliminate illusions, control your hands, do not chase highs, do not blindly bottom-fish. In a volatile market, survival first, profit second. Wait patiently for the risk to be fully released and the market to truly stabilize. Those who like to chase rises and cut losses and want to buy the dip still need to wait longer!

The above is my personal understanding today. There is no stock recommendation. The stock market is risky; invest carefully!

Core tactics reference: gap-filling reversal, massive bearish and bullish candles, box breakout, etc.:
Cyclical market CPO and PCB, helping retail investors establish professional trading thinking (article on April 25)
https://www.tgb.cn/a/2rhPFBxrsXo ;
In mid-to-late May, going with the trend is a practice; don't panic on pullbacks, accumulate momentum and go up again! (article on May 16)
https://www.tgb.cn/a/2rQ5KelN15n ;
Summary of core stocks under PCB cyclical market and in-depth analysis of trend swing strategy! (article on May 23)
https://www.tgb.cn/a/2s2k8R56Chr ;
After high-level collective divergence, combine gap-filling reversal and trend swing on May 28! (article on May 27)
https://www.tgb.cn/a/2s8Xq7cg8M5 ;
Hot theme bull stock washout patterns: In-depth analysis of gap-filling reversal and box breakout! (article shared on June 6)
https://www.tgb.cn/a/2splwyNaGqS ;