7.14 Recap｜Is the index stabilizing for now?

[Taoguba]

Actually, when I review the two posts, I personally think they were written in extremely great detail.

The market opened in the morning in a way that could be described as very lousy, but judging by the intention of the funds to support it, you can see that a large amount of money was lying in wait early on. The funds leaving traditional industries and returning to technology is very obvious. Then there was a sell-off to kill a round of disagreements. But actually, the early-session disagreement was the most severe, and later everything reached consensus—all because early on, Jinan and Hengtong didn’t give positive feedback. Reasonably speaking, though, Ziguang today shouldn’t have had such a big divergence. And if quant funds unanimously dump, it also implies there’s risk at OCS. So yesterday’s first move means today you have to smash it first, then take it back. Then tomorrow it’s again: sell first, with the backhand.

For technology, let’s look at what I mentioned before: in this optical communications sector, the funds only recognize Yizhongtian and Dongshan. The attitude of Inrcom and Dongshan is extremely important. From the order-flow funds perspective, funds are going to do Dongshan first, then do the rest of the back-row for catch-up gains. Tonight, Feihong and Zhongtian will release earnings one after another. I personally believe Feihong is slightly better than expectations, while Zhongtian’s earnings are average. Here you need to see Feihong’s stance, and also whether there is selling pressure from Zhongtian that creates divergence in the sector. Then you’ll have the conclusion.
Rivets: Dongshan Precision, Inrcom, Feihong Optic Fiber (personally I think Feihong’s stance matters more than Zhongtian), Zhongtian Tech.

Next, look at the other sectors—there’s nothing more to say for aerospace downstream. 4️⃣, China Satellite doesn’t express a stance, and doesn’t look for a repair.

Back to semiconductors: Muxi shares showed divergence today, but the chart hasn’t broken down. Most funds flowed into previously oversold sectors. Tomorrow, GPU?
Anchor: Muxi shares.

Semiconductor equipment today had divergence over Changchuan’s attitude. Tomorrow continue to anchor on Changchuan.

This market tells us: don’t trade random low-quality stocks. If there’s a leader, hold the leader.

For lithium batteries, funds’ attitude is very clear—you can’t mess with it.

For PCB: today Shengyi Technology took the lead, which is what I mentioned yesterday, including ccl, Jinan Guoji. In fact, I think Jinan hasn’t finished yet, including MLCC, but for MLCC it’s not as good as PCB. Also, for Tongguan today: you can wait until tomorrow after the divergence ends to see which choice the funds make. For PCB, the “peak” tomorrow is most likely a divergence expectation. Today Honghe didn’t cap the limit-up. Tomorrow it’s better to choose the front-runners to trade—that’s the PCB copper.
Anchor:
ccl: Shengyi Technology, Jinan Guoji
E-electronic cloth: Honghe Technology
MLCC: Fenghua High-Tech
Copper foil: Tongguan Copper Foil

On execution: buy points are still better to delay. First watch the divergence, then watch the funds’ selection. But this selection isn’t about choosing sector random stocks; it’s choosing the leader. If the leader dies, the juniors go down with it. Tomorrow pay more attention to semiconductors. Tomorrow, funds will make a choice—also, the mid-year report expectations are about to be realized. Most of the ones that can survive will likely be the leaders of the next leg. No forecasting—do what the funds choose. Today’s missed-opportunity funds tomorrow will likely be lifting the sedan chair. Hold steady and support it.

But at this point, looking at the index, there are still a lot of trapped positions. Still, in my view, the institutional chips were already collected by the morning. Next, it comes down to who believes first and who is bold first. Will the broader market again go into a structure-based rally? For packaging and testing, things look decent. Funds’ recognition of memory is far less than before. Wait and see tonight what Demingli’s stance is, and tomorrow you’ll know more. This includes earnings released today: tomorrow how much is basically the funds’ anchor. For SK Hynix tonight, it’s likely repair expectations. As for Corning and others, too. But now, pre-market doesn’t represent much. The sentiment in the US is unstable—they like to dip. So overall remember: buy points should be delayed. For technology and materials, continue to anchor on the Japan–Korea stance; domestically, anchor on Yizhongtian and Dongshan Precision.

These are only personal opinions and do not constitute any investment advice!

Thank you for your support!

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