0710 recap: Semiconductor stocks saw a sharp sell-off with a surge in volume in the afternoon; a double top formed—how should we respond going forward?

1. Index interpretation
   Today’s index saw a structure of rallying sharply and then pulling back. In the early session, the market continued the rebound momentum from yesterday: the SSE Composite Index (SSE) once tried to challenge the pressure zone around 4,075, but in the afternoon, technology heavyweight shares were兑现集中 (realized in concentration). The ChiNext, STAR Market 50, and Shenzhen Component accelerated their decline, and the SSE Composite was also dragged lower and pulled back. Yesterday, technology was repaired from panic and directly surged into a climax; today’s early session continued the same, and there was basically no new surprise in expectations. Therefore, the afternoon drop was not accidental, but concentrated profit-taking after the rebound climax.

The afternoon surge in commercial aerospace was not the fundamental cause of the index decline. Rather, it provided market participants with a new trading exit, accelerating capital’s retreat from high-level technology directions such as chips, CPO, PCB, servers, etc. Although today the index performance was poor, there are still many individual stocks closing red. Tansun (同花顺) 全A is clearly stronger than the ChiNext and STAR Market 50, indicating the market is not undergoing a whole-market, systematic sell-off. Instead, it is high-level technology heavyweight weight retreating, while low-level theme stocks and small/mid caps remain active.

The SSE Composite is more resilient than the ChiNext, but the early attempt to break through the pressure zone failed. Into the close, it hovered near the low-end close. At present, it should still be defined as a rebound failure within a consolidation base-building period; a new round of a primary upswing cannot be confirmed. Going forward, the key is to watch whether the ChiNext and STAR Market 50 can stop making new lows, and whether the small-cap theme stocks that rose today will suffer catch-up declines.

2. Sentiment interpretation
3. Trend sentiment interpretation
   Today’s trend sentiment noticeably weakened. Yesterday, technology directions such as chips, advanced packaging, memory, CPO, PCB, and servers all repaired comprehensively. But the repair was too fast: within a single day, it went directly from divergence into a climax, causing today’s opening to already enter the phase of consistency-based profit realization.

Large-cap cores such as Tianke Innovation (兆易创新), Dongshan Precision (东山精密), Xing Sen Tech (兴森科技), and GoerTek? (中际旭创) all showed clear “spike up then fall back” behavior, indicating trend capital is actively reducing its risk exposure to the technology direction. Especially when trading volume expanded significantly, technology heavyweights still could not secure sustained follow-on demand. This shows the market is not lacking liquidity; rather, capital is unwilling to continue absorbing high-level technology.

The server direction is more like a performance-driven “supplementary rebound” in the latter half of the AI hardware cycle. Inspur Information (浪潮信息) had been lagging for a long time. After its earnings guidance created a huge expectation gap, short-term capital quickly completed a sequence of “one-word limit up, acceleration, diffusion, and兑现 (realization).” The price action looks more like short-term capital using earnings catalysts for a rapid repricing, rather than institutions gradually building positions with a trend mindset.

Inspur Information’s own earnings logic is real, but the server sector has not yet gone through a complete primary upswing process of “startup → divergence → backflow → further acceleration.” For now, it still needs to be interpreted as a supplementary rebound market. Even if technology experiences a rebound in the short term, the first repair phase is more likely to become a realization window for the capital that was trapped today and for trend-reducing capital.

2. Short-term sentiment interpretation
   Today’s short-term sentiment appears active on the surface, but the money-losing effect is very severe. There are many stocks hitting the limit up (涨停), yet there were 80-plus first-limit board failures (炸板). This suggests a large amount of chasing capital got trapped on the day.

Hengshang Energy Saving (恒尚节能) broke down at a high level and ended limit down (断板); all stocks at the three-board and above levels disappeared. The market left only nine second-board (二板) stocks, and they are scattered across multiple themes without forming a clear ladder. The ceiling for consecutive limit-ups has a break. The high-card from the old cycle has ended, while the new-cycle leader has not emerged.

The most dangerous part today is that the number of limit-down stocks is still not large, meaning the market has not yet entered full-fledged panic. However, board failures (炸板), spike-and-pullback, and height compression have already emerged across the board. This indicates that the sell-off is more like it just started, not that liquidation has already completed.

The failed board-chasing funds, the high-level technology rebound-chasing funds, and the commercial aerospace momentum-chasing funds could all turn into short-selling forces on Monday. Even if Monday’s early session shows repair, you must guard against trapped funds using the rebound to realize and then weakening again. At present, the short-term market does not have conditions for an active push.

3. Theme analysis

4. Chips and AI hardware are concentrated兑现 (profit realization) after yesterday’s extreme repair. Huatian Technology (华天科技), Shenkeda (深科达), Shanghai Synthesis? (上海合晶) still have some relative strength, but large-cap core names such as Tianke Innovation (兆易创新), Dongshan Precision (东山精密), and Xing Sen Tech (兴森科技) showed strong negative feedback. This indicates sector risk has not been fully released. Until the core negative-feedback names stop making new lows in innovation, do not participate in the first rebound in technology.

5. Servers belong to a performance-driven supplementary rebound in the post-cycle of AI hardware. Inspur Information (浪潮信息) is the core of this supplementary rebound. Both the industry logic and the earnings logic are relatively solid, but the stock price completes repricing through consecutive acceleration, reflecting more the style of short-term funds rather than a stable institution-driven trend position build. Next, only if Inspur Information refuses an A-share market-wide sell-off and capacity players such as Founder? (紫光股份), Inspur? (中科曙光), Huaqin? (华勤技术), Neusoft? (神州数码) also move in step with a trend, could servers upgrade from a supplementary rebound into an independent primary mainline.

6. Commercial aerospace is catalyzed by the successful recovery of Long March 10? (长征十号乙). The news itself is a milestone in the industry, but what the market is mainly trading now is future expectations and concepts, not current-period performance. The sector was already heavily炒作 last year. Many of today’s names are oversold stocks from the old cycle; there are heavier trapped-share overheads and holding positions waiting to exit. In the afternoon today, they were driven from the news stimulus directly into a full-blown climax, so it looks more like an oversold event trade from an old theme.

If commercial aerospace wants to develop into a new mainline, it needs to first go through a major phase of divergence and then keep the true while discarding the false. In the back section, a large-scale elimination must occur; the key is to “hold sideways through divergence” for the core, while the capacity mid-army (中军) simultaneously absorbs and re-establishes height, elasticity, and a trend ladder. Hailanxin (海兰信) can be considered a candidate for 20cm trend elasticity core; China Satellite (中国卫星) can be observed as a capacity mid-army. But on Monday, it must not open consistently high with everyone aligned.

4. The securities direction differs from high-level technology. The industry’s overall performance has clearly improved. In addition, multiple securities ETFs have seen their in-market shares keep increasing during the sector’s pullback, indicating there are real allocation funds providing support. Securities currently appears to be in a stage where earnings are moving upward, valuation is relatively low, and funds have laid out early, but the price has not fully started yet. Going forward, the focus is whether core capacity names such as CITIC Securities (中信证券), East Money (东方财富), Guotai Junan? (国泰海通等) can increase volume in sync, shifting securities from merely “relatively less down” to actively leading the market.

5. Trading and plan
   Yesterday, at the sentiment turning point after consecutive technology sell-offs, I bought Inspur Information (浪潮信息). The buy point itself was not a problem; the trade was based on the expectation gap after technology fear was repaired, Inspur’s earnings beating expectations, and the high recognizability of the large-cap core.

However, the technology repair speed yesterday was too fast: it completed the transition from divergence to a climax within intraday, compressing the rebound window to just one day. This morning, Inspur Information again offered about 7.6% high premium; it has already moved from “expectation-gap trading” into the phase of consistency-based realization. Therefore, selling at the open is the correct action. This trade completed a full closed-loop: “buy the core at the sentiment turning point, then on the next day’s open, realize during the high-open.”

Currently, I keep a 25% strategic core position in the 512880 securities ETF, based on logic that securities industry earnings are rising, valuation is low, market trading volume is high, and securities ETF shares are continuing to increase. This position is managed separately from the short-term aggressive attack allocation. It will be held for now, but will not be added further until the sector forms an active leading advance.

On Monday, stay flat in the short term (no position). Focus on whether today’s board-failure stocks show mass low openings, whether second-board levels can reopen third-board height, whether the ChiNext and STAR Market 50 can stop making new lows, whether commercial aerospace can complete “strength retention after weakness removal,” and whether securities can shift from “resilient” to “actively leading.”

Do not buy the first rebound in technology, do not buy a consistent high open after commercial aerospace’s weekend fermentation, and do not do trial-and-error for the second-to-third board (二进三). The current strategy remains: keep the securities ETF core position, keep short-term cash waiting, avoid sell pressure caused by the conversion of today’s long-only money into selling, and look for new sentiment turning points only after the market completes a real clearing.