3.20 Review: Power Sector Breakthrough Success, New Cycle Awaits Next Week

Don’t look outside the market for logic; look inside the market for signals!
Focus on window signals, trade at extreme nodes!
Always see strength, choose strength, act on strength!

Every day before the market opens, these three soul-searching questions must be etched in your mind:

1. Is there a main theme right now?
2. Is today a key node?
3. Is there a buying point today?

Friends who read yesterday’s review article should already have the answers, so there’s no need to elaborate further here.

Following my yesterday’s approach:

If the Middle East conflict continues for a while, oil prices will naturally rise, but the problem is, they can’t get out of the market either. So, does this benefit our new energy sector, with electricity leading the way? Thinking from this perspective, is the expectation that new energy will replace traditional energy very high?

Therefore, today’s electric power sector continues to strengthen. “LiaoNeng” officially stabilized at 5 boards today, breaking the curse that electric power couldn’t break through 4 boards. The outlook remains bullish. This breakthrough is as significant as when “Shunna” broke the 3-board suppression day. It tells us: the main theme is still there and getting stronger.

1. Today’s operation: Know and act in harmony—add positions when appropriate, press the nuclear button when needed

Following yesterday’s logic, “LiaoNeng” is a critical battle today. If it accelerates and surpasses 5 boards, it’s a good point to add positions today.

In the early trading session, “LiaoNeng” opened at 7.21%, a very handsome increase—indicating strength and leaving room for turnover. No waterfall decline after opening; instead, it steadily absorbed selling. Then, with “Huaneng” hitting the limit-up and “Dongfang” assisting, it quickly sealed the limit. At that moment, I knew the position tested yesterday could be expanded, and I added another batch according to plan. This addition wasn’t impulsive; it was based on yesterday’s deduction: “If ‘LiaoNeng’ accelerates beyond expectations tomorrow, add positions.” That’s the value of a pre-planned strategy.

But the market is always full of variables. Around 9:50 AM, as the market turned red, “Shunna” plunged into deep water, “LiaoNeng” broke the limit, and a huge volume appeared. What to do then? According to discipline, when a stock breaks the limit with high volume, especially if follow-up stocks show negative feedback, it’s prudent to take some profits and lock in gains. So I sold part of yesterday’s core holdings in batches, leaving today’s added positions to recover on Monday. This operation was based on the strength at open and the market’s intra-day changes—both decisions made according to the market situation at the time. Entering wasn’t wrong; exiting wasn’t wrong. As for the subsequent rebound, that’s a story for later. We only need to do the right thing.

As for “Aorui,” it was particularly weak at open, starting at zero, even weaker than “Meili,” so I eliminated it immediately. Such follow-up arbitrage stocks, if they don’t meet expectations, must be decisively cut; hesitation leads to defeat. I pressed the button without hesitation and exited with a small loss. This lesson reaffirms: non-mainline arbitrage should be traded lightly, with quick entries and exits; don’t hold onto the stocks.

2. Index style: After a breakdown, consolidation and grouping are king

The index opened slightly lower, then plunged into deep water in the afternoon, closing at 3957 points, having broken support. In the short term, a bullish outlook is not advisable:

1. Uncertainty in Middle East conflicts intensifies, possibly fermenting during the holiday;
2. Profit-taking from earlier positions will accelerate, creating downward momentum;
3. Institutional products face liquidation pressure, and passive reduction will increase selling pressure.

These risks were described in the article two days ago, so I won’t elaborate further here.

But a breakdown in the index doesn’t mean there are no opportunities. On the contrary, in a volume-reduction and breakdown environment, the arbitrage space for quantitative funds shrinks, and institutional trend stocks find it hard to perform. The market’s pricing power will further shift to the most敏锐的游资 and relay funds. So, the conclusion is clear: grouping and relay trading will likely dominate the current discourse. Only the most core mainline stocks, with the strongest logic and popularity, can stand out amid the chaos. Those following the trend will only suffer worse declines.

Today, only 28 stocks hit the daily limit up, 13 hit the limit down, sentiment is extremely weak, marking the worst market in years. Such bleak data indicates most stocks have already fallen to their limit, and after panic selling clears out, funds will focus even more on the main theme. The weaker the index, the tighter the grouping.

3. Thematic direction: Power sector breaks through, opening new space

Let’s start with the current main theme—electric power.

From “Huayin” to “Shunna,” then to “Huaneng,” and now to “LiaoNeng,” it’s been four stages. The first three leaders all stopped at 4 boards. So many say the power sector isn’t a main theme and can’t break out. But truth often lies with a few. I said yesterday: when everyone thinks it can’t break through, “LiaoNeng” might shoulder the task of opening new heights. Today, it did.

What does 5 boards mean? It’s about breaking the deadlock and redefining the height. It tells the market: power sector speculation isn’t a one-off, but a sustained cycle. Moving forward, as long as “LiaoNeng” doesn’t go A-sharp, low-level catch-up will continue endlessly.

Today’s sector internal health remains good:

· The old core “Shunna” and “Huaneng” are oscillating near zero, with no negative feedback;
· Yesterday’s assist “Shaoneng” nearly hit the limit-up, “Yuedian” opened slightly lower but also received support;
· The new first boards from yesterday are mostly opening red today, with ample premiums;
· During the day, “Huaneng” and “Dongfang” hit the boards again, further energizing the sector.

The only thing to watch is that “LiaoNeng” traded huge volume today, with full turnover, indicating significant bullish-bearish divergence at the 5-board level. On Monday, it must accelerate to a second limit-up to lock in chips; otherwise, it risks weakening.

As for other themes, such as the strong opening of encapsulation, lithography machines, optical fibers today, these can only be seen as oversold rebounds or defensive plays, not relay themes. Why? Because when the index is weak, tech stocks tend to boost sentiment, but their sustainability is always doubtful. More importantly, tomorrow is Saturday, and if larger conflicts erupt in the Middle East during the holiday, these big-tech defensive plays will be overwhelmed. So, ignore other themes and focus solely on power.

4. Timing nodes: Five buy points for “LiaoNeng” explained

Today, I’ll carefully explain the five buy points for “LiaoNeng” to help everyone understand what node trading is:

1. First limit (March 14): This is the first node, initiated on the day “Huaneng” broke the limit, marking the transition point between new and old cycles. It’s the hardest to grasp because it’s uncertain whether it can break out.

2. Second limit (March 17): This is the node when “Huaneng,” the core of the previous cycle, broke the limit. On that day, “LiaoNeng” directly hit the top line, a typical “weakness mistaken for strength” scenario. It’s the first confirmation within the pattern and a common “positioning dragon” buy point.

3. Third limit (March 18): This is a standard weak-to-strong reversal. The stock hit the limit during the opening auction, quickly sealed, marking a divergence-to-unity add-on point.

4. Fourth limit (March 19): Yesterday was a breakthrough of a key node, a “breaking the dragon gate” move. It withstood divergence despite a weak board, and closed back up, serving as a test of quality.

5. Fifth limit (March 20): Today’s buy point is the certainty of breaking the dragon gate. When it opened high and closed at the limit in the morning, the 5-board space was officially unlocked, and the subsequent imagination was vast.

Although the stock broke the limit intra-day, it was due to the market’s drag, a passive break. After recovery, it remained strong. For early movers, taking profits during the break is disciplined and correct; for those with a broader view, holding until the close is based on faith in the main theme. Trading has no absolute right or wrong—only whether you executed your plan.

5. Strength determination: Bid signals and intra-day response

Today’s opening bid signals were very clear:

· “Shaoneng” approached the limit-up, continuing yesterday’s premium;

· “Yuedian” opened slightly lower but quickly turned red, showing strong support;

· The new first boards “Huaneng” and “Dongfang” all opened red, completing the ladder;

· Most importantly, “LiaoNeng” opened at 7.21%, indicating strength and room for turnover, not blocking liquidity with a single top line.

After opening, “Huaneng” led the sector with the first board, boosting confidence; “Dongfang” followed, and the 20cm elastic target also became active. At this point, “LiaoNeng” sealing the limit was a natural outcome. During intra-day break, “Shunna” plunged into deep water but didn’t hit the limit, and recovered by the close, indicating core sector funds maintained support.

6. Tomorrow’s forecast (March 23, Monday): Accelerate and hold, divergence and retreat

Today is Friday, with two free windows after the close, increasing uncertainty. But precisely because of uncertainty, Monday’s performance is more meaningful.

“LiaoNeng” traded huge volume today, and Monday can go two ways:

1. Accelerate to a second limit-up: If it opens high and moves quickly to seal the limit, chips will be locked, and the theme will continue to sustain, with more catch-up stocks emerging. The focus can remain on power.

2. Diverge and weaken: If it opens low or high and then stalls with volume, the cycle may be over. After all, a 5-board breakout is a breakthrough; going higher requires stronger force.

So, the strategy for Monday is simple: observe and avoid rushing in blindly. If “LiaoNeng” accelerates, hold or lightly follow; if it weakens, cut profits decisively and wait for the next “Huaneng” break-the-limit day. Ignore other directions and wait for a new cycle.

Finally, remember: trading isn’t about prediction but response. We can’t predict what will happen over the weekend, but we can make the most reasonable decision based on Monday’s market. Power sector breakthrough success means a new cycle next week—provided you’re on the right train, and on the right train.