3.30 Review: The sharp V-shaped rebound in the index shows resilience. Can optical communication usher in a new chapter amid the decline in the power sector?

The index opened lower but showed resilience as it climbed back up, yet the differences between sectors have become stark, with the Henan Energy regulatory extension leading to a collapse of the power dynasty overnight! Active funds have surged into optical communication and commercial aerospace, marking the official start of the new battle for dominance. [淘股吧]

Following the Trend
Today, the index basically repeated the same performance path as last Friday, opening lower directly due to external influences, making a small upward move before realizing profits, then starting a volatile recovery. Ultimately, the three major indices collectively rose, with the Shanghai index slightly up and the Shenzhen index slightly down. The total trading volume of the two markets reached 1.9159 trillion, a slight increase of 62.6 billion, showing signs of stabilization after last Friday’s shrinkage. The index has shown recovery after two consecutive days of lower openings influenced by external factors, indicating an increasingly clear detachment from those influences, and moving forward, more emphasis will be on following its own pace, primarily continuing to build a bottom through volatility.

After showing signals of divergence last Friday, the power sector officially entered a retreat today, with 9 stocks hitting the daily limit down throughout the day. The retreat manifests in several dimensions: first, high-profile stocks, such as Huadian Liaoning, Huadian Energy, and Henan Energy Holdings, all hit the daily limit down; second, Liaoning Energy and Hunan Development, which were the first to show divergence last Friday, also hit the daily limit down or continued to decline sharply, perpetuating the divergence; third, new energy stocks like Xineng Taishan, which followed the trend, and Jin控电力, which was recovering from a low position, also hit the daily limit down, showing significant negative feedback. The sector has retreated overall from high to low, but today can be seen as a peak of the retreat; although risks are expected to be released tomorrow, they may moderate somewhat.
The retreat in power has become a bloodbath for optical communication and commercial aerospace, which dominated today’s market. In optical communication, 10 stocks hit the daily limit up, with a total limit-up amount of 22.299 billion, Zhongli Group achieving 5 boards in 7 days, Hangzhou Electric 3 boards in 4 days, Changfei Optical Fiber 3 boards in 5 days, Lianxiang 3 boards in 6 days, and Farsen with 2 boards, while the rest had their first boards. The concept index has shown some continuity, recovering further in the moving average system today; if it successfully stabilizes, further attention and tracking are warranted.
Commercial aerospace also had 10 stocks hitting the daily limit up, with a total limit-up amount of 18.179 billion; Shenjian shares achieved 3 boards, and Zaisheng Technology had 3 boards in 4 days, with the rest being their first boards. Overall, the sector’s strength is slightly weaker than that of optical communication, showing interlinkage, but the leading stocks have been rotating throughout the day, with leadership lacking consensus, and the concept index belongs to a rebound from an oversold position, so rotation is the focus for now.
The geopolitical conflict has stimulated the aluminum metal concept, with 7 stocks hitting the daily limit up, totaling 5.194 billion; quantifiable arbitrage is evident, and sustainability is questionable.
The pharmaceutical sector showed divergence primarily, with 8 stocks hitting the daily limit up, totaling 7.975 billion; the announced Meinuo shares achieved 5 boards, 4 stocks with 2 boards, and 3 stocks with their first boards, likely continuing to rotate.

Emotional Fluctuations
Although market sentiment has cooled somewhat, it remains relatively stable, with no widespread increases, still more stocks rising than falling. The main point is that after the continuous recovery on the index level, it has shown strong resilience, which has a significant stabilizing effect on market confidence.
In terms of speculation, there is a stark contrast with the retreating power sector being quite severe, while active funds pouring into optical communication and aerospace are performing vigorously.
The style of clustering continues, but the themes supporting the clustering have noticeably changed, and the switching between high and low stocks is also quite apparent.

Thoughts for Tomorrow
The divergence in power last Friday did not break the consensus significantly, as high positions still showed irregular movements, and the supplementary rise is playing out according to cyclical patterns. The last straw that broke the camel’s back came from the regulatory extension on Henan Energy, and now this arbitrary extension outside of established rules is the greatest uncertainty, leading to a direct collapse of high-profile stocks.
Today confirmed the retreat in power, which means the end of a round of market activity centered around power; moving forward, even if there are fluctuations, they will mainly be individual stock fluctuations. The market will spontaneously seek new carriers, whether it’s today’s optical communication and commercial aerospace or new directions that may emerge tomorrow; this will require a process of competition and gamesmanship, as well as a process for market consensus to be reformed. What we need to do is to intervene and participate after consensus is formed or confirmed, and the best approach beforehand is to observe; even if participation is necessary, such trial-and-error opportunities must be approached with caution.
Of course, considering the trend structure, logic, and capital involvement in these themes subjectively, I still relatively favor lithium batteries and optical communication. Optical communication needs to demonstrate strength once again to confirm its position, while lithium batteries also need to prove themselves through a return flow; how this will unfold remains to be seen.

Operational Insights
Today’s operations need reflection; I made a low buy on Henan Energy Holdings as it approached the floor, which was a mistake under the retreat of the theme, and I must acknowledge that and handle it tomorrow.
I reduced my position in Hangzhou Electric while still holding some shares.
I opened a new position in Rongjie shares, paying attention near the intraday split, and after a day of fluctuations, it ended up slightly up at the close, so I’ll see if it can guide the lithium battery recovery tomorrow.

Post-market holdings: Hangzhou Electric, Rongjie Shares, Henan Energy Holdings (3 stocks).

Data Statistics

☑ Disclaimer: The content of this article is solely personal review notes. Any views or specific stocks mentioned in the text are for example purposes only and do not constitute any investment advice. Please do not blindly follow trends; trading should be done independently, and investments carry risks. Please exercise caution in stock trading!
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