Wednesday, March 25, 2026 Review: Cyclical Bottom and Cyclical Top!

First, let’s qualitatively analyze the current market situation. The cyclical bottom has already formed. It’s important to note that once the index’s cyclical bottom appears, it also indicates that a certain sector’s cyclical top has emerged. This is a process of top-bottom reversal. So, if you’ve been following my reviews regularly, make sure to pay attention to my wording! [Taogu Ba]

Yesterday evening, the US markets dipped slightly. Before the market opened, both the Korean and Japanese markets rose, and futures also gave a good signal. Precious metals moved higher. According to previous logic, whoever leads the index is responsible. Previously, resource-related stocks led the Shanghai Composite lower, and today, resource stocks led the index higher. However, since both opened high, they tend to open high and then fall back, especially since both the Shanghai Composite and ChiNext face resistance levels above. Yesterday’s volume was thin, and the pre-market comments included keywords: volume + surprise! That means if the market wants to challenge the gap area above, it needs to increase volume and push higher. Also, stocks that rallied late yesterday face profit-taking today.

Around 10:20 AM yesterday, I pointed out an opportunity in the comments—at that time, it was the market’s lowest point. The decline at open was driven by stocks like Yizhong Tian and Sungrow Power. PCB stocks showed strong support, so I looked at Jingwang Electronics. It proved that as long as the overall timing and rhythm are correctly judged, even if the market isn’t the strongest, small gains can still be made today. Funds are still favoring optical communications and storage chips, supporting the expectation of a market rebound today.

Apart from that, the market from Monday’s robot stocks, Tuesday’s military industry, and today’s again robot stocks, all indicate that the market is beginning to bottom out. Overly oversold conditions have become a market line! For swing traders, this is the best moment—dawn is near. Keep a flexible mindset, trade T+0! Many people are unclear about how to do T+0. Doing T+0 involves the initiative of stocks—you choose stocks you believe in, and the key is your selection! Remember, the process of continuously lowering costs as stocks rise. T+0 can be divided into two types: one is during a decline, when the market environment is poor and stocks keep falling—this is a spread trade, buying more as the stock drops, say 10 points, then adding more, averaging down. When the stock rises, you reduce positions accordingly. This is a passive approach. The active T+0 involves intraday trading—judging the market environment after the market closes and making trades accordingly. For example, take Guangxun Technology: the sector was falling, but Guangxun Technology moved against the trend with large orders and crossed above intraday moving averages. That’s a B point. Some might ask, what if I buy wrong? Remember, your core position is already in place. If you buy wrong, you can always exit. The premise is that you are sure this stock is suitable for swing trading. So, there’s no worry about buying wrong or missing out! Short-term traders should not use this method; short-term is a one-shot deal!

This month is about to end. Looking at the Shanghai Index, it’s still the same pattern—since the year-end adjustment, especially from last Thursday to Monday, the market has been heavily sold off, with a drop of about 5000 points. A rebound in the past two days is very normal. If many people lost money this month, that’s also normal. Especially considering that yesterday’s broad rally was disproportionate to the previous decline—there was a broad decline, but the broad rise only brought back some of the losses. That’s the current market situation!

From the upcoming market perspective, I lean more towards a trend style—an era of new and old replacing each other. This means the market will likely have low risk but require precise timing, and it will be very testing. This period is about washing out those who are not firm in their holdings. It’s a process!

Returning to today’s market: At 9:25, Mingpu Guangci opened with a single line. This was due to last night’s announcement of a small batch shipment of 800G LPO optical modules. It’s reminiscent of the photovoltaic boom years. Last night, I wondered—if this product has no bottlenecks and everyone can produce it, wouldn’t that be a negative signal for Yizhong Tian?

Hunan Development was a single-line board, as power stocks led yesterday’s rally. The more authentic leader today was Zhongmin Energy, which coincided with Fujian. In the afternoon, Min Dong Electric also surged due to Fujian, hitting the limit.

At 9:30, Shao Neng Shares quickly hit the limit, also from Guangdong. Then it retreated, releasing divergence. The back end started accelerating, which was positive for yesterday’s second-tier stocks like Liaoning Energy and Zhejiang New Energy. Funds preemptively acted, with first boards at low levels, showing signs of upgrading to third-tier.淘汰掉了拓日新能，也就是淘汰掉了光伏！那协鑫能科和协鑫集成日内就没什么意思了，今天回落的回落，水下的水下！

Most stocks have some layered effects. For example, at open, optical communications stocks performed very well, with Hangdian Shares hitting the limit immediately. Huadian Liaoning Power, with the “power” character, was led by Jin Kai New Energy and others with added computing power. If tomorrow’s computing power strengthens, Jin Kai and Yu Neng might surge again.

At 9:31, Saigen Technology surged to the limit, driven by Space IPO news. Commercial aerospace stocks opened high collectively—this was the batch from January. But today, commercial aerospace retreated, while AI applications didn’t fall much.

Similarly, Rongjie Shares and Yunnan Germanium had good openings. Rongjie chose to increase volume on the board; Yunnan Germanium was pushed up passively but not strongly. Now, even sentiment stocks upgrading to third-tier are a problem, let alone large caps.

At 9:33, 263 surged to the limit, which should be viewed together with Aoruite’s single line. Last night, a new term “word economy” appeared, related to this sector. Guanghua Xinwang surged strongly at open, including data centers and computing power stocks. Daxia Technology hit the limit, Zhishitong upgraded to second-tier, and other familiar stocks like Bangzheng Electronic, Tianji Technology, Zhongjia Bochuang, etc., showed signs of message-driven trading. The overall sector didn’t retreat after the initial surge, with expectations of further strengthening. The ongoing hype has been on power stocks, justified by power-electrical synergy, which is now generally aligned. Going forward, there’s a wave of sector rebound in computing power.

At 9:35, Tefa Information surged to the limit, with Xineng Taishan pushing the concept of Zhongli Group. The core of fiber optics is Longfei Fiber. On the intraday, Tongding Hulian and Huamai Technology hit the limit, with Changjiang Communications and Hangdian Shares also showing strength, combined with power stocks. On one hand, US stocks are rising in this sector; on the other, fiber optic prices are increasing. During the session, copper cables like Shenyu and Wol Nuclear Materials also moved, indicating that copper and fiber are no longer opposing each other. Currently, the strongest AI hardware sectors are optical communications and optical chips, with storage also in the mix.

At 9:53, Zhejiang New Energy surged to the limit. After half an hour, power stocks accelerated, including Zhongmin Energy, Guangdong Electric Power A, Energy-saving Wind Power, Ningbo Energy, etc., all hitting the limit. Followed by computing stocks like Litong Electronics and Zhishitong, which also surged. Today’s market finally saw “collaboration” between power and computing sectors.

At 10:19, Lixun Precision hit the limit. Today’s focus was on optical communications, with related stocks like Guo Chain showing activity—224G high-speed cables! Market cap over 200 billion. Hope the related stocks that follow don’t fall back too much.

At 10:26, Guanghua Xinwang broke the limit, then Changfei Fiber also broke the limit. The index experienced slight volatility, and the weightings had issues. Institutional breakouts didn’t matter.

At 10:27, securities firms appeared to prevent the index from falling further. The market still traded 130 billion volume, having pulled back to 110 billion earlier. Yizhong Tian retreated, with some investors protecting it. Today’s index isn’t a big problem; the main board and ChiNext are still oscillating. Follow whoever is leading—don’t chase blindly. Unless you’re a lurking player, you won’t maximize profits if you don’t sell. Don’t chase the hot stocks!

At 10:40, Zhejiang Construction Investment surged to the limit, likely responding to Zhejiang New Energy. Why not bring out Zhejiang Shibao? It’s also Zhejiang.

The number of limit-ups in the morning was relatively low. I thought later that the trend might favor institutional bias. The afternoon’s rebound in limit-ups was mostly low-quality stocks, similar to today’s second-tier stocks, which overall lack quality. This actually stirs up sentiment—an unhealthy sentiment! The number of second-tier stocks upgrading today indicates that funds are betting on tomorrow’s Huadian break, targeting key nodes. Such “node targeting” is often meaningless.

At 11:00, Vico Technologies surged to the limit, related to sodium-ion batteries, initially aligned with Chanyi Technology. After a minute, Chanyi Technology also surged, but the significance was limited. In the afternoon, Shengyang Shares responded.

At 11:14, Dian Guang Technology surged to the limit, with funds beginning to flow into computing power stocks, including Hongbo Shares. Be prepared for a surge in computing power; too many moves already!

Near noon, the ChiNext was actually retreating, which is normal. The Shanghai Index used banks to hedge, keeping the index smooth. Since a rise is expected tomorrow, retail investors must consider resistance levels above. It’s like the main players signaling a move—either chase tomorrow with a pullback today, or hold today with uncertain accuracy.

In the afternoon, funds directly attacked robot stocks, driven by US news that by 2030, robot numbers will surpass cars. Xinquan Shares, Ruineng Technology hit the limit, Hengbo Shares surged then retreated, and stocks like Siling Shares and Fusite Technology held up well. The big weights like Sanhua Intelligent Controls and Top Group reacted little—mostly small caps, a kind of consolation prize.

Also, in the afternoon, CPU stocks surged. The news was that Intel’s CPU prices increased. Locally, Longxin Zhongke and Great Wall Electronics responded, reflecting quantitative trading. The entire afternoon followed this pattern, with little real significance.

At 13:09, Tianqi Lithium rose over 3 points. Morning tech, afternoon cyclicals—main creators switched. Zhongji Xuchuang was pulled back, entering a chaotic phase.

At 13:40, East Money surged, corresponding to Hong Kong stocks’ rise—mainly Meituan and Alibaba. The news was that the takeaway war was over, as per the Economic Daily. The afternoon was quite frustrating—one piece of news affected Hong Kong stocks, which in turn affected A-shares. Impressive!

At 13:57, Hunan Tianyan surged to the limit, in military stocks. Later, Great Wall Military also hit the limit. Coupled with China Oil Capital, it might be military sales. But after Pingtan Development, it’s off—related to Fujian. Fans are reminding that small moves are happening! The reaction was intense: Inner Mongolia First Machinery jumped from 4 points underwater to nearly 5 points above water, Beifang Longyun surged with a 20-point amplitude, closing with an 8-point gain. The news was probably not genuine; it’s outside the usual pattern. It’s a classic overreaction. I was thinking—why such a big reaction? It shouldn’t be. The main line—the strength of power stocks—was disrupted!

At 14:04, Yu Neng Holdings plunged, then Pingtan Development surged, following the Strait concept. Funds layered in with Min Dong Power. If funds recognize it, Min Dong Power is suitable; if not, the Strait concept is just a quick play. I find it quite unreasonable.

By close, total market turnover was 21.928 billion yuan, with volume of 968 million, 4,874 stocks up, 560 down. Note the volume structure: during the day, volume once exceeded 1.8 trillion, then after military stocks surged, volume shrank immediately. Yunnan Energy and Yu Neng Holdings’ plunge was related. From this, analyze:

1. Military stocks indicate uncertainty. If they continue to strengthen, it could damage market sentiment. But, from a capital perspective, they only represent oversold conditions; nothing else. No expectation of sustained strength.
2. Yu Neng Holdings’ plunge was after military stocks surged. Sector divergence is normal. Historically, Yu Neng and Hangdian Shares have alternated between divergence and strength. The plunge today suggests funds are preparing for tomorrow’s divergence, like Huadian and Liaoning Energy breaking. The entire power sector is well-paced, with no stock exceeding 200%. It shouldn’t end here. The sector’s divergence at the end of the day indicates that those who didn’t break today should not actively separate tomorrow. Otherwise, problems arise—like Jinkai New Energy, Ningbo Energy, Gansu Energy, Tongbao Energy, Jin Gong Electric, Zhejiang New Energy, etc. Stocks that didn’t break—like Zhongmin Energy, Shao Neng Shares, Fuchun Environmental Protection, Baitong Energy, Guangdong Power A, Huadian Liaoning Power (with some omissions)—should hold. The wind power sector, especially, is a bit surprising, representing power stations. Tomorrow, the hope is to ride the wind—using concepts to sustain the sector’s longer-term trend. The chance of Zhejiang Electric Power Shares accelerating today is small; perhaps Yu Neng Holdings will lead sentiment back.

Previously, I defined the market as having a cyclical bottom. I also mentioned that the index is signaling a clear move. As long as the market doesn’t volume up and the batch attack doesn’t exceed expectations, it’s better to not hit the daily limit or to cash out early in the sector’s leading stocks. Key words: rotation, waiting for the index to retest the bottom, and then a new wave of market.

If the past month since the New Year was about survival, then the next month is about working with the main players to acquire chips—trying to lower costs. The most painful moment isn’t the decline itself but the hope and subsequent disappointment. Retail investors often can’t hold on. Many sold in the morning yesterday, and many started to exit at the open today, ignoring volume. The current market is against human nature. Our approach should be objective—calm as water, consistent for thirty years. Main players aim to make retail surrender chips—twice a year: April and November 2022, October and year-end 2023, early 2024, and the entire second half until 9/24, then April 2025. Trading is a long process. If you can make money every month, chasing daily limit-ups, then there are many Buffett-like investors in A-shares. Remember those in early 2023 involved in commercial aerospace? How are they now? During weekend live streams, I did a survey—many lost all their 2025 gains. Life is like chess—there are highlights. But first, survive. Don’t enter when confidence is gone; don’t get caught up when you should be cautious. The market isn’t short of similar people. It’s about certainty—risking a point, testing cost-effectiveness. Even one point matters—not for the trade itself but for experience. Keep refining, and you’ll become resilient!

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