Index breaks support, hold the core trend!

【Like and Follow, Limit Up Can’t Stop Us】[Taoguba]
【Cheer and Tip, Holdings Keep Rising】

This week’s market has indeed been tough, but I believe brothers who are committed to the core electric cooperation theme, as long as they focus on key stocks pulling back to critical moving averages for low buy-ins, avoid chasing highs and hitting the limit, they can still gain something. Of course, what’s more difficult than the market itself is the increasingly strict regulation from JG. From the weekend when Yunnan Energy still got a continuation after a limit-down to Monday night when even Tainpu, with grass two meters high on its grave, can re-enter the JG pool, the pressure from JG has prevented high levels from forming. Without high levels, the market can only have width, turning into a breeding ground for quantitative harvesting.

Similarly, due to indescribable reasons, next week’s review can’t be as detailed as before. But loyal followers who check the reply area daily should know that I’ve been repeatedly rotating within Huadian Energy all week. After Shun Na’s low point on Tuesday, it didn’t break out into the expected leading trend, so I unfollowed it on Thursday. Besides that, only Friday’s Neng Electric’s contrarian surge and sector rebound caught my attention. Let’s review this week’s market together.

1. Weekly Market Review

Monday:

Last Friday, I mentioned that funds chose to cash out to avoid weekend uncertainties, causing both indices and sentiment to adjust. Hanlan and Yunnan Energy, two stocks with high potential, also hit limit-down that day. Over the weekend, conflicts continued to intensify. On Monday, the index opened lower and continued to decline. Yunnan Energy, despite a limit-down on Friday, was still bought up again, leading to two consecutive limit-downs on Monday. This shows that regulatory easing is still far off.

In the afternoon, the rescue of the index wasn’t from the core electric cooperation theme but from the sudden rise of storage chips, with multiple stocks hitting limit-up, and the sector surged 2.5%. This was partly driven by expectations of Nvidia’s conference.

Many brothers asked whether storage could be a good play. I firmly said that the storage sector did not meet the 10+300+3 condition. Even when I broadened the scope from storage to the entire chip concept, although more than 10 stocks hit limit-up, including 20cm tall Langke Technology and Jintai Solar, the highest sector leader was only Yaxiang Integration with 2 limit-ups, which still didn’t meet the 3-limit-up condition.

Similarly, the chemical sector showed some performance but was limited to stocks like Sanfangxiang and Jinniu Chemical, which also didn’t meet the 10+300+3 criteria. So my attitude then was that chips and chemicals didn’t warrant too much attention.

In contrast, the core electric cooperation branch, especially energy storage, had 8 limit-ups. If we expand the scope to include green power and wind power, the entire electric cooperation sector had over 10 limit-ups, with some stocks reaching 20cm and more than 3 limit-ups. Since last Friday, the sector has been in a big divergence, yet it still maintained the 10+300+3 echelon condition, which is why I keep emphasizing that this is the cycle for electric cooperation.

Tuesday:
At the open, storage chips from Nvidia’s conference were heavily liquidated, with a large red candle engulfing Monday’s green. Although Yaxiang Integration advanced to 3 limit-ups, the number of limit-ups was small, and there were no stocks hitting 20cm limit-up anymore. On the other hand, the core electric cooperation theme, especially energy storage, quickly rebounded after opening. Shun Na’s stock unexpectedly hit a new high with 2 limit-ups, and Hanlan, which previously failed to reach high levels, was now being relied upon by funds.

Unfortunately, dragged down by the index, the sector experienced a weak recovery and was reversed. But even so, a simple rebound in the sector was enough to meet the 10+300+3 criteria. Persisting with the core electric cooperation theme is not wishful thinking; it’s clear that aside from the impact of conflicts, the only sector capable of sustained profit is electric cooperation.

Wednesday:
Electric cooperation tried to rebound again at the open, but the effort was weak. After a weak start, the index continued to decline. In the afternoon, storage chips continued to strengthen, pulling the index back, closing with a very thin lower shadow. At this point, some asked again if storage was about to break out. However, the 10+300+3 condition was still not met. This time, several stocks reached 300, but Yaxiang Integration hit a limit-down again, and the number of stocks hitting 10 limit-ups seemed insufficient. Overall, this sector saw a big surge on Monday, a red reversal on Tuesday, and another rebound on Wednesday—quantitative cycles of repeated harvesting, unlikely to form a climate.

On the main line, the electric cooperation sector was still recovering, but the problem was obvious: the high-flying stocks like Shun Na, which performed well on Monday and Tuesday, actually fell on Wednesday during the sector’s recovery. This raises a question: if stocks like Hanlan and Yunnan Energy failed, and Shun Na also fails, does that mean high-level stocks can’t be crossed over from the previous cycle? Then only stocks born before the end of the rising cycle can be considered. However, on the same day, Jinkai New Energy actively surged and hit the limit, indicating that even if Shun Na isn’t doing well, funds will continue to try near-term opportunities.

Thursday:
Initially, I thought that after the extremely thin and stable close on Wednesday, Thursday might confirm a turning point with a volume-driven rebound. Many funds probably thought the same. So, electric cooperation stocks surged strongly at the open, with Jinkai New Energy directly hitting a new high. But other sectors were mixed. For example, storage stocks, which formed a bullish engulfing pattern on Wednesday, plummeted today; chemical and oil & gas stocks, benefiting from conflict-related news, opened high but then declined.

The final result was that after a low open, the index attempted to rise but lacked strength and fell back. The previously strong electric cooperation stocks couldn’t resonate and also fell back. The market declined broadly, with nearly 5,000 stocks down, and the index once broke below 4,000 points. Panic signs appeared, with the number of limit-down stocks rising from zero to five by close. Notably, early in the day, Shun Na weakened again, confirming its weakness, while Huadian Energy surged sharply—this stock was born after the end of the rising cycle.

Although the index closed above the February 3 low of 4002, it couldn’t confirm a downward break or a turning point. The final direction will be decided on Friday. Data shows Thursday was a bottom, with the limit-up echelon not only breaking the high but also some stocks hitting three limit-ups. Since the index didn’t break down and sentiment showed signs of recovery, there’s a chance for a strong rebound on Friday.

Friday:
If this week was the biggest test of whether the core theme could hold, then Friday was the most challenging day. Its movement wasn’t simply about success or failure but a tug-of-war, as the market’s rhythm on Friday shows.

At the open, it seemed like a resonance rally, but in reality, the growth in the ChiNext tech sector was frantic for liquidity. Currently, the market’s volume isn’t enough to support such a crazy surge. As large-cap tech stocks rose, the power sector’s liquidity was siphoned off, causing a pullback. The market, along with the power sector, declined. This shows that funds do not support tech stocks to rally in resonance; otherwise, the index should have gone higher during tech’s surge, not plunged. Near midday, the photovoltaic sector exploded, with Neng Electric rebounding, and the electric sector resumed inflow, pushing the index back into the green. It’s clear which direction the market recognizes.

Unfortunately, in the afternoon, sectors retreated again, and the index fell sharply, filling the 3977 gap and ultimately dropping below 4000 points. At this point, it’s no longer meaningful to guess the bottom from the left side; it’s better to stay defensive and patiently wait for the index to show a turning point.

2. Next Week Outlook

Initially, I thought that this cycle would be as difficult as the early stage of the aerospace cycle, but I underestimated it. During the aerospace cycle, the index was at least in a range-bound oscillation, but now it’s directly breaking down. The expected easing of external tensions didn’t happen—in fact, tensions worsened, with oil prices soaring and inflation rising, eliminating the Fed’s rate cut expectations. This is the main reason for the continuous decline this week. Of course, regardless of the cause, when the index stays below the moving averages, it indicates that funds are mainly defensive. Some blame the market’s inability to reach new highs on regulation, but the main reason is probably that funds have shifted to a defensive stance.

With the index continuously adjusting, it’s pointless to predict the bottom from the left side. Just be patient and wait for the index to find its own turning point. Two signals are worth noting if they appear: one is the extremely thin volume stabilization + a new volume-driven rebound with a large daily candle, which was possible after Wednesday’s thin stabilization but failed on Thursday with a new low; the other is a large-volume bullish candle pointing sharply upward—any sufficiently large bullish candle can change perceptions. Whichever appears, the direction resonating with that day’s bullish signal will be the core focus in the next phase, likely still within a branch of electric cooperation.

If I had to make a prediction based on cycle theory, the previous cycle from January 13 to March 9 was a rising cycle corresponding to index oscillation. The rise cycle ended on March 10, and we entered the initial phase of electric cooperation, which corresponds to a transition from oscillation to a breakdown and decline cycle. It has been 9 trading days now. When it reaches 13 days, will a change occur to enter the next phase?

That’s all for this week’s review. Creating content isn’t easy. Thanks to brothers who like, tip, and comment every day. If this article helps you, I hope you’ll support me with a like, tip, and encouragement!~

Next, the reward leaderboard:
Weekly Review Leaderboard:

Dragon 1 @horse1010 5000 points

Dragon 2 @作手龍七 2000 points

Dragon 3 @红警666 1000 points

Support List:

Thanks for everyone’s support! Welcome @念缪@啊民哇@老吴炒股日记 to join my big family! Current members: @深泉A@洪州鸣哥@大明白8@奋告大师@nikkkkki@一郑锋@核桃的大兜子@扑街007@年华果粉@六脉达摩神箭@bjt789@山水有相逢XS@风行a股@移动sd@济南小宋@余砚秋@花开半夏666@雨夕@随大侠@cassssper@超短看主升@五花膘@谷一法师@坐着坐着就开窍了@池老哥@豹哥1991@红警666@乾隆世家123 @念缪@啊民哇@老吴炒股日记，感谢大佬们的支持和信任！

Finally, regret to inform everyone that due to some force majeure reasons, I will no longer be able to share my daily trades in the reply area starting next week. The first part of the weekly review has also been significantly revised today. Unfortunately, JG is becoming stricter, not only in stock movements. Anyway, I’ve always tried to provide both fish and fishing, and I hope everyone continues to support me. I will still teach openly and honestly.

For example, why try Hanlan and Shun Na, what does it mean if they don’t succeed, or why I am optimistic about Huadian based on cycle nodes—these were shared with everyone last weekend. Combining this week’s market trend and feedback from Jinkai New Energy and GCL System, have you gained a deeper understanding of the cycle? If yes, please support with a like, tip, and encouragement!~

【Disclaimer】: All stocks mentioned in this article are for observation and research exchange only and do not constitute any investment advice. The stock market involves risks; please trade cautiously!