Look! This is exactly one step ahead of retail traders! Sharing market rhythm and details!

Today, the A-shares market plunged sharply in the early trading session, once creating a market crash atmosphere. The number of stocks rising across both markets was only a few hundred, and panic sentiment was spreading. In the afternoon, funds flowed back in, and a strong recovery was seen toward the close, with the indices bottoming out and then rebounding, gradually warming market sentiment, completing a dramatic deep V-shaped reversal. The market structure showed significant differentiation, with previously hot sectors retreating collectively. The chemical sector, which led gains last Friday, and the high-profile computing and electricity collaboration sector both plunged sharply, as high-level capital was eager to cash out, leading to quick divergence after reaching high levels. Meanwhile, some areas showed strong profit-taking effects, with storage chips and PCB sectors defying the trend and strengthening, becoming core safe havens in a weak market, with capital shifting toward core technology. In a weak rotation market, rhythm is far more important than direction. Recently, I repeatedly emphasized: “Don’t chase the consensus.” After the computing and electricity collaboration peak last Thursday, I warned against blindly following; on Friday, the chemical sector exploded across the board, and today’s rally was clearly a point to exit. All previous predictions have been validated by the market, with the core logic being to avoid following peaks and to grasp divergences for low buy-in. [Taogu Ba]

Currently, the market seems difficult, but in fact, it’s quite challenging. The difficulty lies in the fact that while the index appears to stabilize, internal divergence is at its maximum. Under low volume and oscillation, funds are showing extreme clustering behavior, and the market is exhibiting a clear “structural裂裂.” The overall market’s advancing to declining ratio is over 2800:2400, seemingly more advancing than declining, but the median gain of individual stocks is only 0.14%, indicating weak actual profit-making effects. Most sectors are being drained of capital and remain sluggish. Simply put, the signals are quite clear: during last Friday’s market adjustment, funds already sent clear signals—storage chip leader Damingli hit a new high against the trend, and PCB leader Huidian Shares surged significantly. Smart money entered early, betting on the index bottoming out and recovering. I also pointed out in the morning that if the index breaks below the 60-day moving average, it could trigger protective buying by national funds and quantitative funds, leading to a technical rebound. Historically, during rebound phases, tech-related sectors often last about two days, making this rebound operable. Focusing on these two directions makes the analysis simpler today.

Many friends now see the right direction but struggle to pick the right stocks. Essentially, it’s about understanding the logic of Huagong Technology’s “Wudao” rhythm: distinguishing genuine core stocks from those riding the trend.
The faster the market rotation, the more you need to focus on two types of stocks: the most authentic core stocks with solid fundamentals; and the leading stocks that drive sector rhythm. For example, in storage chips: the leading trend-following stock is Damingli, which hits new highs against the trend and drives the sector; the most authentic core stocks are Zhaoyi Innovation, Jiangbo Long, and Buwei Storage, with institutional concentration and strongest fundamentals. In PCB: currently leading the rhythm is Dongshan Precision, and on Friday, Huidian Shares led the sentiment, alternating to lead the sector.

Once the market’s logic is validated, let’s discuss future expectations:

Although the index is repairing, it’s clear that funds are not fully认可! Why do I say that?

First, today’s rebound in the index was evident, but overall market sentiment did not follow the recovery. Short-term sentiment data remains at the freezing point, showing superficial strength but internal weakness. Funds are already showing defensive tendencies; sectors previously resonating with sentiment, like power, have continued to decline, indicating that today’s fund attitude is not decisive. The market’s stability is entirely due to storage chips and PCB holding up. A very real intra-day signal: as soon as storage and PCB stocks show slight stagnation, the index weakens immediately, with no other sectors able to take over or support. More importantly, during the rebound, liquidity and trading volume did not expand, meaning the existing stock game cannot sustain a broad rally.

Second, technically, today is the third time the market has tested the 4050 support zone, and the bulls are showing extreme hesitation. After touching 4050, the index did not quickly recover but hesitated repeatedly before a passive rebound. Technical experts understand that around 4050 is a strong support zone where the 60-day moving average and previous lows resonate. Normally, with enough bullish sentiment, the index would rise early without needing to fully test support. But today, the market repeatedly bottomed out, indicating insufficient confidence and low willingness to follow through.

Third, from a technical pattern, repeated supports tend to weaken over time. The first low was on March 4, the second confirmation on March 9. When everyone recognized 4050 as a strong support and expected a rebound, the third test itself signaled weakening. The index’s inability to rebound strongly after testing support and the lack of volume are classic signs of weakness.

Therefore, if there is no volume-driven, stronger-than-expected recovery, the 4050 support, which has been tested multiple times, is likely to be broken. Once broken, the index will test the lower boundary of the consolidation range. The medium- to long-term slow bull pattern remains intact, and the range-bound oscillation does not necessarily mean a breakdown, but a short-term below-4050 drop could accelerate the formation of a true bottom. Overall, if the index continues to rebound tomorrow, watch out for the risk of a sharp pullback. For tech sectors, adhere strictly to core principles: do not chase highs; believe in tech stocks rising from low opens to high closes, but not from high opens to high closes.

Let’s talk about computing power collaboration:
Why should we not rush to bottom fish in computing and electricity collaboration early in the morning? Because the opening signals have already clearly written the answer—understand the core performance, and you’ll understand the sector’s attitude.

Signal 1: China Power Construction, which was at a low on Friday, received multiple positive news over the weekend. The market generally expected a strong open and accelerated rise. According to normal recovery logic, positive news + sector rebound should lead to a significant gap-up and strength. But today, it opened lower, well below market consensus, which is the most direct sign of disappointment—funds are unwilling to follow, only wanting to cash out.

Signal 2: GCL New Energy is the hottest computing and electricity collaboration stock over the weekend, with strong momentum on Friday and high recognition from funds. If the sector is to recover, it should open high and show profit-making effects. But it opened sharply lower with no support, unable even to form a strong oscillation, indicating that funds had a strong desire to cash out at the open. Subsequently, large-cap stocks within the sector plummeted. Without volume, how can the sector rally?

For short-term sector analysis, focus on core benchmarks. China Power Construction and GCL New Energy are the most representative stocks in computing and electricity collaboration. When the core stocks open below expectations and weaken, it indicates the sector has no recovery intention and faces selling pressure.

Have you noticed that the market actually has a predictable pattern of expectations?
Last Thursday, among the high-level stocks in computing and electricity collaboration, Sun Na Co., Ltd. was the weakest, meaning it was the first to fall behind. Yet today, when the sector was falling sharply, Sun Na Co. held up the best and was actively supported, showing a contrarian expectation gap. There are many such cases; GCL New Energy, previously following Jinkai New Energy, suddenly outperformed Jinkai New Energy during the correction, becoming more proactive in recovery, which is a market quantifiable signal.

What about expectations for computing and electricity collaboration?
The core logic revolves around two-way expectations: green power sources like wind and solar provide low-cost electricity to support large-scale computing power, a promising direction with potential for major trends. But in the short term, it must align with market sentiment and the market’s rhythm.

Previously, computing and electricity collaboration resonated with market sentiment, reaching three consecutive limit-ups. According to short-term patterns, tomorrow’s sentiment likely expects a correction. But note that high-flyer stocks that lack strength or cannot turn weak to strong are likely to be the points where funds exit, leading to sharp pullbacks and profit-taking. As sentiment rebounds, there will be clear high-low switching within the sector: high-flyer stocks with large gains will face pressure, while lower-priced stocks that catch up will attract more funds. The logic is simple: with shrinking volume and large divergence, funds are more cautious about high prices and prefer safer, lower-priced stocks with higher margins of safety.

Chemical sector:
Today, it intentionally weakened. No need to analyze now; wait for subsequent pullbacks to share insights.

That’s the review! We’ll discuss more in tonight’s live session. Please help pin a summary and give a like!

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