4.2 Review: At record-low trading volume, the Shanghai Composite Index stubbornly holds at 3900. In chaos, who is the pioneer to break the deadlock?

Global market jitters are in the air, and the indices are once again facing a test. As volatility from overseas distractions stacks on top of waning energy, trading volume hits a new intra-year low. The A-share market once again sinks into broad-based declines today—while the Shanghai Composite Index stubbornly holds 3,900 points to base. This is stubborn resistance from a technical perspective, but even more so a psychological line of defense in the game between bulls and bears. In the benign differentiation of the pharmaceuticals sector, the low-level regeneration in power, the stubborn resistance in communications—tiny sparks are quietly surging beneath the frozen order book. In a chaotic weak setup, continue to stay patient and keep a close eye on the direction that breaks the deadlock. [Taoguba]

Chasing the trend to get to the point
It’s still hard for the index to decouple from overseas. Trump’s speech causes a global downturn, and Asia-Pacific is no exception. The three major indexes all opened lower and trended down all day, and ultimately all closed lower together. What stands out today is that volume is only 184.30 billion yuan, which is down 16.95 billion yuan versus yesterday. This kind of volume is a new intra-year low. But looking at yesterday’s index rise, it didn’t feel that strong; and today’s index fall, on the contrary, doesn’t feel that weak. The main reason is that after noon the Shanghai Composite still stubbornly holds 3,900. Judging from the past two weeks’ trend, continuing to base within this range may be difficult to a greater extent.

With the market behaving like this, the strength of themes looks even weaker. In pharmaceuticals, there is still differentiation today, but there is also some continuation. Throughout the day, there were 8 limit-up stocks, with total limit-up amount of 5.724 billion yuan. Tientsin Pharmaceutical accelerated—stayed at one-word limit-up to advance to 5 boards. BeiDa Pharma and YiBai Pharmaceutical both reached 2 boards. There were 5 first-board stocks. Wanbangde and Lianhuan Pharmaceutical mainly traded in a range. Meinuohua tried to reverse, but failed. Overall, although pharmaceuticals shows a certain degree of continuity, the strength hasn’t increased. Next, it needs to further reinforce itself to prove it—if it continues to be a knockout format, expectations will be lowered.
Triggered by Trump’s speech, oil and gas rotates intraday. There are 6 limit-up stocks, with limit-up amount only 2.497 billion yuan, and all are first-board only—so it’s hard to see continuity for now.
In addition, optical communications showed some strength at the open, but during the session it still couldn’t strengthen. There are only 3 limit-ups. The trend stock Feixian Optic Fiber once touched the limit-up, then after cracking it still closed sharply higher. Hangdian Co., Ltd. mainly traded in a range. What this direction shows is resistance.
As for yesterday’s rail transit and computing power, today they are both a complete washout—rotation keeps going.

Mood swings
Yesterday’s big rally reflected fluctuations and randomness on the board. Sure enough, today the market shifted from broad gains to broad declines, and once again returned to an ice point. A cold day followed by a hot day’s large swings only shows that market weakness hasn’t changed.
The speculative sentiment actually improved before the indices. Today’s consecutive-board upgrades were better—4 out of 5 consecutive-board stocks advanced. The only one that broke the board didn’t give any negative feedback. In these two days, the power direction that lost the most today still continued to decline, but some have already clearly started to stabilize. Liaoning Energy, Hunan Development, Huadian Liaoning Energy, and others have taken over to some extent. Only Henan Energy and Huanneng, Guangxi Energy are still pulling back further. It’s expected that by tomorrow the process will basically be finished.

Thoughts for tomorrow
The countermeasures for several consecutive days have mainly been to wait, stay patient, and observe the emergence of the direction that breaks the deadlock.
And today’s board, despite being relatively weak and chaotic, also has some subtle threads. First is pharmaceuticals: there is some continuity, and the high-standard stocks are accelerating. If the high-standard stocks break through and open up further room, and if the more group-oriented ones like Wanbangde can continue to provide positive feedback, then pay attention to whether it develops into a small-cycle pattern. Second is power: although the previous batch of high-standard stocks is releasing risk, a new batch of group-hub carriers may form—such as Zhonggang, Datong South, Xinneng Taishan, and so on. We need to watch whether they can continue to guide the sector’s rotation back and repair. Third is communications: Falsheng continues to circle around and deviate, Feixian and Hengtong keep making new highs, while Zhongli and Hangdian, and others, still maintain a relatively good trend. You can say that several directions each have faint sparks shining. Going forward, you’ll need to track these sparks and see if they can further spread into a prairie fire.
Of course, from the big-picture standpoint, the priority is still to defend—stay patient and wait for the board to become more stable, improve tolerance, and let the赚钱效应 (profit-making effect) return.

Trading reflections
The difficulty on the board is relatively high. At the open today, I first cut/closed positions in Mingo Optoelectronics & Magnetics and Hangdian Co., Ltd. Mingo was watched yesterday when it was on the board; today it basically came out at a roughly even position. Hangdian previously did several rounds of buying and selling (doing T) continuously, building some profit cushion—so this was essentially taking profits.
I opened two new positions, and both are purely for entertainment.
At the open, I half-chased following the move in Zhongli Group, then later at a position below waterline I added a little to Shenjian Co., Ltd.

Positions held after hours: two—Zhongli Group, Shenjian Co., Ltd.

Data statistics

☑ Statement: The views described in this article are only my personal review notes. Any opinions and individual stocks mentioned in the text are used only as examples and do not constitute any investment advice. Please do not blindly follow. Trading is your own decision; investing involves risk; and stock trading requires caution!
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