This week, Precision is laying groundwork and building momentum within domestic compute power—how should we view the market next week?

Good evening, everyone. It’s almost the weekend again. I have a temporary plan to go traveling for 2 days this weekend. Tomorrow I won’t have time to write articles for everyone, but when I’m back in the evening, I’ll summarize this week and today’s market for you. Today’s market was very exciting—it was like a “super intraday fortune” day. Today, for my short-term trading, I only held 6 stocks. In the morning, Huatian Technology hit the one-word limit up; Tsinghua Unisplendour, Huawen Microelectronics, and Zhongheng Electric all also closed at the daily limit up. These four are the short-term limit-up trades I had today. Of course, there are also 2 other “Xingwang RUIJIE and China Merchants Securities.” I originally planned to do some low-buying in the afternoon for Silan Microelectronics, but seeing the technology/price action was not right, I didn’t continue trading.

Today is also the weekend, so I’ll also talk about my current holdings and my stock-picking logic—why I chose them. At the same time, I’ll analyze them for you by combining the broader market and the themes.

[Taoqb]

Let’s start by breaking down the market mood today based on the stocks I hold:

1、The morning market was able to continue the strength from yesterday—that was within expectations. And the strength of domestically made computing power semiconductor—there’s no doubt. In the morning, “Huatian Technology,” as the sentiment leader in the semiconductor market, went straight to a one-word board—there’s absolutely nothing wrong with that. Also, step by step, Zhongheng Electric, the computing data center stock, quickly hit the daily limit up. This is a stock I participated in through the opening-auction bid this morning. At one point during the session, it opened briefly, but the buy order strength for the limit-up was still around 2.5 billion (yuan) —the strength was good.

Huatian Technology has already been held since Tuesday. Basically, from the weekend onward, I had been paying attention to the Huawei “Taoding Rule” line. Plus the expected Huawei 950 release, packaging should definitely be the core focus. So on Tuesday, July 7th, I used the opening-auction when the yellow moving average showed up to take a starter position and hold it. And Tuesday was also very strong—it directly went limit-up. In semiconductors that day, there were also similarly aligned stocks like Ganyuan New Materials hitting the limit-up.

The expectation on that day was that semiconductor PCB would have a repair expectation. On Tuesday, within semiconductors and PCB, Dongshan Precision indeed received money ahead of time for a first wave of “repair.”

On the morning of July 7th, the key focus was still the semiconductor line—especially the Huawei computing power and Taoding Rule area. On Tuesday, when I traded Huatian Technology, from a technical perspective, it’s that Huatian Technology had a downside cross-doji on Monday. And as a packaging recognition stock, it really showed the momentum of a sentiment leader. On the morning of July 10th, the large order locked it for most of the time. At the end of the day, due to the tech rout in the STAR Market 50 and ChiNext, it ultimately exploded the board. I had to do a passive reduction because of it, keeping profits as the top priority.

(Huatian Technology chart analysis)

2、In terms of Huawei domestic computing power and domestic substitution here, the core picks in switches and servers expanded from Xingwang RUIJIE, Tsinghua Unisplendour, and Inspur Information, among others. For Xingwang RUIJIE and Tsinghua Unisplendour, I have positions through today. Today, Xingwang RUIJIE’s trading volume couldn’t climb—i.e., OBV kept showing outflow. Even though today’s pullback tested the 5-day line and there was gap support below, when it was in the middle of the day and still on the red with strength, I cut back significantly, leaving a bottom seed.

For Tsinghua Unisplendour, I need to remind everyone specifically: in yesterday morning, when most people were choosing to leave while it was underwater, I reminded that there was no problem, and I even added to the position and bottom-picked against the trend. Of course, yesterday’s sentiment was still good—it kept being about “Inspur Information bringing the lead.” On Wednesday, this stock gapped up and broke above the previous high, and I did it then. It also had an afternoon board-explosion that day. Very clearly, this was the price hitting the previous high and the main force responding with a proactive “break the board and shake you out” to wash off selling pressure. Then on the next day, I reminded everyone: this is a core big stock for Huawei computing power. On Thursday, it would be necessary to watch for a board-explosion weak-to-strong setup.

Why look at Tsinghua Unisplendour? Understand these points well—value worth ten thousand;

1、The core stock for Huawei computing power domestic substitution;

2、From the bottom, an ultra-strong bottom formation appeared. How could you miss a pattern like this;

3、After the board explosion, weak-to-strong—combined with the theme.

Intra-day weak-to-strong after Tsinghua Unisplendour broke the board: when everyone first got to know me, I particularly liked doing this setup. A gap up opening is beyond expectations; opening underwater at -2% or around the 0 line fits expectations; opening at -4% would be underperforming expectations. The key focus here is: when price and volume stand above the yellow moving average, that’s when you can enter. If it opens 2 percentage points higher than expected, there’s a possibility of a limit-up—then you would need to chase.

Here’s an opportunity to also revisit the logic for watching board-explosion stocks, including how to read intraday. How to look intra-day? Only when they trade with volume and stand above the yellow moving average is it watchable. Within the first 10 minutes after the daily open, you need to search for 2 intraday high points and 2 intraday low points on the timeframe. The highs should become progressively higher, and the lows should not become progressively lower. When it stands above the yellow moving average with volume, that’s where the intraday setup is worth watching. (Below the yellow moving average, there is no opportunity to watch.)

3、On July 9th, yesterday’s market saw a volume-expansion bullish candle for stabilization. With the continuous support from the National Big Fund’s holdings and Huawei computing power + semiconductor domestic substitution, semiconductor chips, semiconductor equipment, semiconductor materials—including CPO and PCB—received capital repair. The broader market also formed a super-strong bottom formation at about a 60-minute level. At present, it’s still a turning point where the broad market is stopping the decline and turning upward. After the bottoming, on July 10th morning it was indeed also very good—the market rose on increased volume—but due to several factors, many stocks still ended up rallying and then giving back gains.

In my late-session trading, I had no choice but to trim the board-exploded stocks—Tsinghua Unisplendour, Huawei Electronics, and Huatians Electric. The bet in China Merchants Securities was about the Changxin IPO expectation. It didn’t get fermented in the morning, so it was directly reduced via the opening auction. The subsequent expectation is definitely still there.

4、As for July 10th’s market, you can roughly see the reasons for the big drop during the day. How to do it next week:

1）、The upside pressure level is once it passes 4,060 points. After hitting 4,070, it won’t go so smoothly. The pressure can’t be broken in one go—so a normal pullback is expected;

2）、For ChiNext, the overseas computing power chain’s expectation was already not strong. Plus it’s recently the earnings cycle, so many overseas computing stocks related to Nvidia that were previously at high levels have adjusted sharply. The repair yesterday, analyzed from several core stocks, was basically the overseas computing power chain’s “rest” during a downtrend. After that, you need to be especially careful. From next week up to July 17, you still need to focus on domestic substitution;

3）、The commercial aerospace news stimulation after midday was basically the fuse for the afternoon’s big selloff—it’s not that commercial aerospace is about to rise. It’s also possible that there are a few individual stocks with good earnings at the bottom that can still stage a small rebound;

4）、The STAR Market 50 pulled back sharply. Here, for domestic computing power, there are pullbacks to different degrees—that’s normal. Next week, you still need to continue watching domestic computing power and the semiconductor industry chain’s domestic substitution. Before Huawei 950’s product is released on July 17, and before Changxin’s July 16 subscription, the logic of semiconductor domestic substitution still needs to be the core focus.

5）、The broad market has already formed a W-bottom. Next week is going to consolidate and move upward. When the US Fed’s CPI data comes out on July 15—if it meets expectations, and if the impact from overseas markets fades—then wouldn’t our internal semiconductor tech be fully building strength over these past few days? Will it just go straight up? I hope there won’t be as many huge shocks again in mid-July.

Also, many stocks still haven’t shown a stop-the-fall signal. Never bottom-pick. Even if a stop-the-fall appears, is the bottom formation that shows up definitely a bottom signal? For high-level PCB and CPO, you need to be careful. Many of those stocks may do intraday repair, but the probability is still higher that it’s a downtrend continuation.

(Overseas computing power chain in a downtrend, and those that have already had too much of a run up—any stop-the-fall signal must still wait, maybe many are just “downtrend continuation rest.”)

What does a strong bottom formation look like?

The above is my personal understanding today. There is no individual stock recommendation. The stock market is risky—invest with caution!

Reference for core strategies like: break-the-board then reverse and re-open, huge-volume bearish candles and huge-volume bullish candles, box range breakout, etc.:

Cycle-driven CPO and PCB market—helping retail traders build professional trading thinking (April 25 article)

https://www.tgb.cn/a/2rhPFBxrsXo ;

Practice is to go with the trend in the mid-to-late May—don’t panic during pullbacks, and then build strength again and rise! (May 16 article)

https://www.tgb.cn/a/2rQ5KelN15n ;

In the PCB cycle market, summary of core stocks and an in-depth analysis of trend swing strategies! (May 23 article)

https://www.tgb.cn/a/2s2k8R56Chr ;

After a collective divergence at high levels, on May 28 break-the-board then reverse-and-reopen and trend swing combinations! (May 27 article)

https://www.tgb.cn/a/2s8Xq7cg8M5 ;

Popular theme bull-stock pullback mode: break-the-board then reverse-and-reopen vs box breakout—an in-depth analysis! (June 6 shared article)

https://www.tgb.cn/a/2splwyNaGqS ;