04.06 Review: The Final Negotiation

Declaration: The following are personal thoughts, not investment advice [TaoGuba]
Limit-up situations

Two-consecutive limit-up

Breakthrough from 2nd limit-up to 3rd limit-up

Breakthrough from 3rd limit-up to 4th limit-up

Breakthrough from 5th limit-up to 6th limit-up

Limit-up hit and sold off

Top 20 by percentage decline

Yesterday’s limit-up on the ChiNext board

Today’s limit-up on the ChiNext board

Limit-up and down market conditions
38 limit-ups, 41 limit-downs

I. Market

(1) About tomorrow

I went back to my hometown for Qingming to pay respects to my ancestors. I just got home at night, so the detailed weekly review will be paused for now and I’ll add it next week. Doing a single, direct review of the past 9 days’ trading action will be more intuitive and more visually engaging.
What everyone is paying the most attention to over the weekend is Yimei’s final negotiations—whether it will sign a ceasefire agreement or whether the war continues to escalate, and the answer will be given in the next 24 hours.

A-shares are still moving according to their own cycle rhythm and the money-making effect. When, as before, Huadian Liaoneng opened up the money-making effect—then as the U.S. escalated its conflict with Yimei, the theme followed the same pattern: low open and rebound, and a deep V in the index. Later, when the leaders adjusted, there was the momentum shift toward negotiations: the index surged, but the money-making effect was not strong. Tech opened high and then fell. But this time, the ceasefire agreement could last 15–20 days, so there’s no need to worry about the outside market anymore, and there may be a different kind of change.

After Huadian Liaoneng topped out, the funds continued to game it out at the next-high level. Rongjie Co., Ltd. and Meinohua did not continue to open up further space. While Meinohua was consolidating in its high range, Tianjin Pharmaceutical opened a rapid acceleration route, going on to a 6-day streak of limit-ups, driving innovative drugs to keep repeating.

Tianjin Pharmaceutical also needs to face its test. If it goes limit-up again, there will be pressure from abnormal trading. I’m mostly observing it as an emotional sentiment marker. After it sealed the limit-up on Friday, there were also funds engaging in arbitrage via Meinohua bond convertibles—whether they’re watching Meinohua for follow-through on the rebound, or whether something new is starting up. Meinohua’s performance will also influence each other.

In optical communications, Huiyuan Communication came out as a one-price limit-up. Xineng Taishan took a 2nd limit-up with turnover—let’s see how the follow-through is. It boosted stocks tied to the “communications” theme such as Tongyu Communication and Beitong Communication, all of which surged. Near the close, Farsuccess (FAL-SHENG) suppressed the action and showed an anomaly—let’s see what the feedback looks like. In this wave, Hutchison Optical, Yangtze Optical Fiber, and others have been trending upward all the way, which is relatively strong.

In computing power, early this morning funds moved SiTexi on a 20cm board to a limit-up. Near the close, YunSai hit limit-up as well—this has been discussed a long time ago: limit-ups within the trading range. Now funds also prefer to look at chart patterns; however, other sectors didn’t provide strong spillover.

For power, this low-level adjustment is a bit off. For example, Guangxi Energy and others have fallen back to where they started. Let’s see whether Huadian Liaoneng can seal the 20-day line. Funds that launched from low positions did Xinzhonggang with an open high and then a pullback; the funds are mainly focusing on arbitrage through bond convertibles. Shenzhou Aerospace’s Jianshen (Shenjian Jianshen) saw a big adjustment—mainly because the sector couldn’t provide positive feedback. The first board stocks China-Supreme Holdings and Raycom Defense were both hammered.

During this period, quantitative rotation is still far too fast—control your multi-position exposure. Over the weekend, the overall news is still a bit more warm and bullish. Watch for when popularity stocks show positive feedback, and then be more proactive.

II. Action

I took a low entry on Huadian Liaoneng, betting on a rebound pullback. It looks like I got in a bit early—let’s see whether it can stop the decline.

Best wishes

Reviewing the market isn’t easy—if you can, a few more free likes or reposts are the biggest support to me.

Investing is a lonely practice. You have to be able to hold onto prosperity, and also to endure loneliness.