7.14 Recap: The broader market has risen for the second time— is this a reversal or just a rebound? Big brother Hengshang Energy Saving continues to hit the daily limit!

Hi everyone, I’m A Ming. I’m happy to get to know you all and meet on this platform!

A Ming’s core idea: Emotional reversal is king; themes are the marquis; “the four highs” are the core; “the two overs” are the generals; pre-play is the shield

1. Every day before the market opens, ask yourself 3 questions:

1. Is the stock you’re about to trade part of the main trend?
2. Is the stock you’re about to trade a breakout setup?
3. Is the stock you’re about to trade the first and only one?

2. Today’s market picture: Yesterday the overall market was extremely terrifying—it was also “three declines to three ice” (three-day consecutive downturns). Although those “three ices” can sometimes absorb sell pressure and not fall further, that’s not always the correct thing. Because yesterday, what got killed were high-level tech stocks. The domestic-industry chain was comparatively defensive. But if you bought the low-level domestic-industry chain yesterday, then today you get killed again—this time even more brutally, for example: Ziguang Co., Ltd. (紫光股份) and Inspur Turing (中科曙光), which were defensive yesterday. And especially commercial aerospace: the ones defensive yesterday went straight to limit-down at the open today. For instance, China Satellite (中国卫星).

In a market-wide “everything gets hit” situation, the only way is to form an emotional consensus—an emotion-based crowd. But many teachers are afraid of heights when it comes to emotional plays. That’s why this is an unsolvable problem! Either you go for the highest, or stay in cash. The highest represents the emotion—everyone recognizes that only that area is safe—so no matter what the broad market does, people who are selling are fewer, and naturally there will be buyers pushing the stock price up!

3. Let’s break down the logic behind Hengshang Energy Conservation (恒尚节能) using the rear-view mirror:

Hengshang, Suqian, and Xingye all acquired technology companies. Their start happened when technology stocks—represented by companies such as InnoLight/JCET (中际旭创)—began to fall. The timing of that start was extremely precise, and it was also a latecomer that moved to tackle the whole tech sector.

Suqian went with “consecutive limit-ups + trend,” and it also fits the pattern of leading the dragon. Xingye wanted to follow with consecutive limit-ups but didn’t break out. That’s because both are acquiring the same type of indium phosphate (磷化铟); if there is Suqian, then Xingye doesn’t have room to do its thing. This is the “first and only” concept the master talks about!

Hengshang’s acquisition is storage chips. With ChangXin Memory (长鑫存储) having an IPO listing expectation, it gained funding recognition and expectations!

Of course, all of this is a rear-view-mirror perspective. It’s not something we could comprehensively sort out at the time. So we only need to look through the “first and only” perspective—because capital will help us sort it out. We just need to follow!

4. Tomorrow’s thoughts:

1. Will technology be a reversal or a rebound? Tomorrow, look at the broad market’s pre-open call auction, the sector call auction, and the opening movement to judge. If it’s a reversal, tomorrow will definitely see a gap up and rally. If it’s a “rally then fade” pattern (冲高回落), then the relay/continuation capital that chased this afternoon must retreat in time!

2. Harbin Pharmaceutical (哈药股份): Yesterday it had three limit-ups, but today it was wiped out by the whole group (全军覆灭). Especially Lifang Pharmaceutical (立方制药) also showed a “rally then fade” pattern today. Today, Harbin Pharmaceutical is a high-volume “deep dip” (爆量凹) and it is the first and only. If the task that Lifang failed to complete today—will it be completed by Harbin Pharmaceutical tomorrow? That’s a key point. If it reaches four limit-ups, then that would be beyond expectations!

Does Harbin’s move come from the medical sector, or from the line of “year-on-year profit growth / interim report profit increase” (中报预增)? Today the “interim report profit increase” theme surfaced with a high-volume breakout pattern. Whether it’s medicine or interim profit increase, it hasn’t broken to the height level of consecutive limit-ups. So is Harbin Pharmaceutical tomorrow a breaker of the pattern (破局者)? Wait and see.

Tomorrow, combine the “interim profit increase” sector with Lifang to watch together. If Lifang has severe negative feedback, will it affect Harbin? Or is Harbin going down the “interim profit increase” line?

Any single stock talk that departs from the sector and sentiment is just handing over money for free!

[The above article is only for my personal sharing and record, and does not constitute any investment advice. Do not blindly follow for trading. If you buy or sell based on it, you bear all risks and losses. If you think the sharing helps you, please like, comment, and give support to increase the post’s popularity!]