[Red Envelope] 3.31 Review. Buy the dip in Shunhao, Dazhongnan! Trading logic > Market analysis > Tomorrow's strategy.

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Today’s trade recap:: All operations below are practiced on a simulated account only, for market review and learning—NOT guidance for real trading.

Short-term account:

Sell: Guiguan Network Sold off on the spike to take profit, all that work for nothing (followed on yesterday’s board)

Commentary: I got confused by which announcement came out at the close yesterday. Luckily it allowed for a decent exit. Let me explain why the opening call auction didn’t follow. Because there was relay/continuation capital inside yesterday. When the announcement came out, the low open was within expectations. But we still had to wait for in-session funds to rescue themselves for a wave.

Buy: Datongnan Watched at the 0 line, red up 10 percentage points

Commentary: In the opening auction, Datongnan had a clear抢筹 (aggressive buying) action. This is also something discussed in weekend posts—how to look at opening auction volume capacity (not all expanding red bars mean you’ll hit the limit-up. Looking at Datongnan is looking for the power-returning/power inflow reversal and the re-opening expectation; you need to meet various conditions to make a move). I checked the high-limit targets that hit the daily limit-down yesterday. In the auction, there were also counter-reversal actions. So the fact that Datongnan’s auction抢筹 didn’t get hammered at the open—that’s the “B point.” Of course, even deep-water opportunities among high-limit stocks can have good value.

Holdings: Shunhao Shares Red up 12 percentage points (followed while underwater yesterday)

Commentary: The underwater bargain-purchase I flagged yesterday, with the aerospace momentum developing. The front-row names were too high, so I picked Shunhao for a recent active arbitrage play.

The core of short-term trading is actually very simple: it’s doing the patterns within your knowledge. Strong execution. Don’t hold any fantasies. If your expectations can’t be met within what you understand, you must exit fast. A simple one-sentence summary: short-term doesn’t guess the top. Only watch today’s weakness and strength.

Trend account:

Holdings: HeShuang Intelligent Green up 15 percentage points

Commentary: A passive “throat lock.” Just wait for the rotation back. Trend patience is all you need.

Opening auction recap:

1: In the opening auction, yesterday’s limit-down stocks in bulk showed counter-reversal. Specific tickers won’t be named. You can all see them. In point three, I said: if someone wins the one-word limit in the auction, that provides guidance. Shunfa Hengfa with a one-word limit in the auction had an electric-attribute. At this point, you can look at it more optimistically.

2: Mei Ruohua snapped off the board. Under the sector, there was also potential for follow-up gains. But snapping off the board means accelerated disagreement/divergence. It depends on whether the follow-up stocks can break into a second wave (二波). Today there was no good spot to board.

3: In the opening auction, ShenJian opened up more than 7 points, and with ShenZhou also opening up as assistance on costs, MeiNuoHua blew up. Then aerospace’s ChengDacheng composition would take over. Just keep an eye on commercial aerospace low-absorption opportunities. As long as the leading/front few active names had intraday low-absorption today, they could make money.

4: For those with the one-word limit in the auction, it’s directly telling you Shunfa Hengfa—electric + energy storage. Based on today’s explosive volume, it’s exactly showing the guidance/rotation-back effect. It also shows that capital doesn’t look favorably at today’s market.
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Here’s an extra note: the main line is about electricity. Only watch for repairs, not strength. The purpose is deep-water arbitrage. Don’t get attached to it. There are currently no signs of stabilization—don’t put too much faith in getting stuck.
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Market overview:

Overnight, the external markets showed a split/partial divergence: U.S. stocks—chips and storage sectors—fell sharply due to industry-related negative news. International oil futures continued the up-move after pushing higher. In the past it was always A-shares leading the externals, but in the last two days, A-shares have been running their own independent action.

At the open, all three major indices collectively gapped up. The Shanghai Composite pushed above 3900 points and tested a prior gap, but within the market, buy-side willingness was cautious. With no volume to carry it, the index quickly fell. In the afternoon it kept drifting lower in sideways-to-down consolidation, and finally all three major indices closed lower: the Shanghai Composite lost 3900 points, the Shenzhen Component’s decline widened to 1.81%, hitting a new intraday low. From sector rotation: the previously strong aerospace and AI hardware sectors came into adjustment. Meanwhile, the power sector—hit hard yesterday—started repair today. The optical communications sector saw an early push higher affected by the U.S. stocks-related names’ drop, but due to the logic of domestic substitution support, it still showed an early spike. Storage, computing power, and other sectors followed the weakness of the overseas market; there were clear catch-up-lagging/“missed the drop” characteristics.

Quantitative strategies continued to dominate the market. When indices gapped down over the last two days, quant funds bought near the lows. Today after the gap up created a price spread, the intention to lock in profits was strong, leading to “spike up then immediately pull back.” At the same time, the rotation speed of themes inside the market accelerated. What used to take several days to complete the divergence-and-repair process could now be done within a single day. With low enthusiasm to chase highs, low-absorption arbitrage became the mainstream. Also, no new main-line theme appeared in the market so far. Capital rotated among old themes for repair, but sector continuity remained insufficient.

Short-term sector sentiment

Highest: 4 boards (ShenJian Co.). Height was heavily capped/pressured; MeiNuoHua failed to advance. The market’s pressure was on 4-board stocks. Inside each sector, internal differentiation intensified—follow-on stocks dropped sharply. Funds withdrew from high-level themes and moved into defensive sectors.

Power sector: Yesterday’s disagreement accelerated into a sharp sell-off. Today in the opening auction, the disagreement reduced, making repair inevitable. The key to watch is whether HuaDian LiaNeng shows a counter-reversal action in time. It didn’t manage a limit-up close on the reverse (no full reversal and limit-up), but it did lift the sector. XinNeng TaiShan, Datongnan and other tickers also showed reversal/repairs. However, the sector’s repair was only rotation—not led by a core leading dragon. Going forward, we need to observe the counter-reversal strength of the core names.

Innovative drugs sector: The high-level name MeiNuoHua fell behind in the decline. But JinYao Pharmaceutical broke away from the high-level group and advanced independently to a third board. WanBangDe completed a reversal-and-repair. This shows the sector wasn’t a full-on retreat—rather, the high-level names’ pressure suppressed sentiment, and funds rotated around low-position names. Going forward, watch for follow-up gains from low-position names.

High-speed rail / Commercial aerospace: ShenZhou high-speed rail had a very strong gap up in the opening auction, which became an attribute guidance. ShenJian advanced to 4 boards. First-board stocks like China Railway Materials and JinXi Railway Axle saw fermentation. This became the strongest offensive theme of the day. The sector moved into an independent trend based on ticker guidance, with no obvious negative news pressing down. Going forward, you can watch for its persistence.

Optical communications / Storage: Impacted by the large drop in U.S.-related names, the overall sector adjusted. But optical communications saw early spike behavior because U.S.-based Corning faced capacity insufficiency, warming up the domestic substitution logic. Early on, funds recognized domestic substitution logic highly. During the adjustment, there were low-absorption opportunities. The storage sector was affected by price flash-crashes, showing clear catch-up decline traits; it currently doesn’t have conditions for repair.

Next market:

Today is the final trading day of March. A-shares gapped up and then fell back. The core issue is insufficient volume. When the Shanghai index tried to challenge a prior gap, there was no incremental inflow from outside the market to take over. After in-market funds cashed out, the index fell quickly. Ultimately, all three major indices closed lower. Trading value didn’t show any obvious expansion, reflecting that funds outside the market are still in a wait-and-see stance.

Index level: Focus on the strength of follow-through after indices pull back. Wait for the opportunity where volume expands and a bullish resonance forms. Until clear signals appear, prioritize light-position arbitrage and avoid heavy-position offense.

Theme level: No new main-line theme yet. Continue doing rotation arbitrage around old themes. Focus on the persistence of high-speed rail / commercial aerospace. For the power sector, watch for counter-reversal opportunities in the core names. For innovative drugs, watch for follow-up gains where low-position names break away from high-level names. For optical communications, do low-absorption based on domestic substitution logic.

Trading rhythm: Under the fast-paced rotation led by quant strategies, chasing highs easily gets a big loss. The pattern of low-absorption repair and opening-auction best-case setup has a higher risk-reward. When sentiment for consecutive limit-ups is weak, avoid high-level names and focus on first boards and attribute-stacking names for going from 1 to 2 (一进二).

Risk avoidance: Sectors more affected by overseas markets, such as computing power and storage, should stay on the sidelines for now. Among consecutive-board names, avoid those that haven’t broken away from high-level-name suppression and that have poor chip structure—don’t chase/relay.

April’s market is about to start. The current market is in a choppy base-building grind. Volume and new themes are the two core variables. Only when both form a resonance can the market move into a truly meaningful rebound. Before that, stick to a steady arbitrage strategy and wait for the market to give clear “bullish for longs” signals.

For consecutive boards: the ceiling/limit is again very constrained. Today’s opening auction only had one Shunfa one-word. Nothing I like at the moment—let’s not talk about it. Intraday it’s still mainly low-absorption. When the opening auction gives high certainty, then join/queue after or hit a board.

Secondary plan and thinking:

1: Observe whether the technology growth sector can stop falling and stabilize

2: Whether ShenJian in the opening auction matches expectations—continue to have it lead and drive sector fermentation

3: MeiNuoHua’s failure/board break increases divergence in the sector. Can the follow-up JinYao independently advance to the next level and lead the sector back?

4: Does the new electricity sector stop falling and repair? Continue the slow rotation-back.

5: Is there any new theme showing first-board anomalies?

From now on, the next-day trading ideas, and the short-term + low-absorption swing-trade approach, will be shared in the “day-before-next-day thoughts” before the next day’s open. (Overnight expectations will still be placed in that day’s recap; if there isn’t, it means I didn’t like it or didn’t see it.)

Technical post direct↓↓↓↓↓↓↓↓↓↓↓↓↓↓

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Weekend content dump. Master the rules for the opening call auction. Distinguish between the dragon-head, the core/center (middle/serving roles), and follow-ups—stay away from random low-quality followers!

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Ultra-detailed limit-up + swing trading practice manual: opening auction decides life or death; buy/sell during the day—this trading system is understandable even for beginners!

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From quant to short-term: key flexible tactics in the chaos phase. How to avoid risks, prevent account drawdowns, and stabilize returns!

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The core swing-trading strategy

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How to improve the win rate of limit-ups. When you encounter a terrible limit-up board and an exploding-volume board, what to do the next day?

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Only trade patterns within your knowledge

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Thanks to the family who liked/kept it up on the last post: @Xiangzhou netizen @Lu Hongyan
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Thanks to the family who tipped on the last post: @98 charity @Tutu rabbit Xiaobao @Wei youlai

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If you’re out there feeling lost, not satisfied with your trades, or your market understanding is lacking—want to quickly change the current situation. Improve your understanding, improve your account, and stabilize compound returns—then come join my Dragon Army Golden Fan family. I’ll slowly teach you and help you spot defects in your trading, providing good thinking for you to reference. No need to run around outside anymore. Just quietly stay here.

There is no standard answer on the trading road—only the rhythm that fits you. Execute the plan strictly: don’t be greedy for more, don’t chase highs, and don’t blindly follow. The additional detailed core tickers are all filtered through logic and validated on the chart. I hope it helps everyone step on fewer traps and eat more meat!