[Red Envelope] Empty positions to avoid the second wave of the power tide, pharmaceuticals and aerospace take turns performing, who can ultimately lead the new cycle?

The power sector is seeing its second wave of pullback, with Henan Energy Holding and Hua Dian Liaoning Ener both hitting the daily limit down. How should the market move from here? And how should we seize the next new direction? vita takes you into a deep analysis of the tape, actively catching the next-stage leader![Taoguba]

About the mindset: **
What people call “short-term trading” is a battle for a moment at key price levels.
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You place trades a few times a month. When emotions are shifting in strength, consider the risk-reward ratio and take that bet. Cut losses small and let winners run big. Once your risk-reward is right, over the long run, compounding will not stop.
When choosing targets, forget all complex technical indicators, forget all good-news and bad-news headlines. Hot topics are your only condition for thinking.
Knowing all this is enough; the hardest part is controlling human nature. Some people are naturally extremely greedy; some are born with no desires and no demands. Different systems lead to different outcomes.
People who can get into this place are all sharp. One is smarter than the next. I want to say: smart people can see through others, but wisdom is what allows you to recognize yourself.
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Until you examine your own weaknesses—using discipline to avoid them—so you can truly come out the other side!**
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Every day, vita shares short-term trading details in real time during the session, along with vita’s personal big-picture view. The trading style is heavy-weight positions in core certainty. The ultra-extreme “leader hunts leader” model gives both new and old fans a broader perspective to look at the short-term market.**
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1. Market sentiment cycle

1. Broad-market conditions, how themes play out
   In the weekend, conflicts continued to escalate. The US dispatched ground forces, causing the market to gap down sharply right at the open. But we already confirmed the index cycle last week. 3.24 was a selloff-stopping node; during the day, it again turned from weak to strong. The index’s intraday performance was relatively beyond expectations. However, on the theme side, it went into a clearance. Early on, the two leading stocks all gapped down together. Once the funds directly gave up resisting, the power sector showed a choppy downward trend all day. Even by the close, there was no fund to fight back and reverse.

The direction led by the indices in the morning—where the indices converged—was metals and fiber. The continuously resonating move during the session was the commercial aerospace theme. Near midday, longiang Railway news provided a boost to the construction engineering theme, which was collectively lifted by quantitative bidding. But it was obvious that the funds didn’t recognize it; even the next-tier lineup didn’t ferment.

The afternoon lift also included the solar power theme. It was performing in tandem with commercial aerospace. Ultimately, what held through decently all day was commercial aerospace. Chemical stocks were兑现 and sold off, pharmaceuticals split, and at high levels, the market was taken over by pharmaceuticals.

2. Index cycle
   At this stage, the cycle for the index is still unchanged. It still has to use 3.24 as the stop-the-fall node. The medicine theme that formed consensus and fermented was the strongest. Next came the Strait theme, then military industry. These three are the return directions repeatedly flowing back during the current power-sector pullback node. As for the index today, it completed a turn from a bottom/low point to weak-to-strong. But unfortunately, the power sector was exactly in a pullback phase. When one whale falls, everything rises—these directions took turns performing. Going forward, as long as the index doesn’t break below the bearish line of 3.23, and instead chooses to move upward to fill the gap, then for the 3.24 stop-the-fall node, these directions still have expectations of strengthening and repeating.

New cycle
(1) 3.24 index bottoming as the starting point—up to now
Strongest theme: pharmaceuticals. Next: strait. Also: military industry, and commercial aerospace are the strongest intraday!

The power sector’s cycle

(1) The first pullback node was 3.13: Henan Energy Holding hit the daily limit down; 3.16 was the “second retreat” node. Hua Dian Liaoning Ener pushed a one-word limit up, taking over the power sector’s second-wave trading profit effect.

(2) Until 3.27 marked the top. Today, the sector entered the second-wave pullback. 3.30 was the first day of the pullback. The whole sector was smashed; at mid-to-high levels, almost everything went into deep water.

In the comment section, friends have many doubts about the second-wave trading. During the transition from the second wave to the third wave, why did it go straight into a pullback instead of choosing another small cycle? Let’s talk about it by using the weekend’s “insider material” we shared. We’ve always emphasized that capital will be the first to ferment, and it’s easy to identify the potential top leader at each stage. Looking back to the day when Hua Dian Liaoning Ener’s board broke, the market’s space board offered a place for Hunan Development. If Hua Dian Liaoning Ener hadn’t chosen to do the reclosure during Thursday’s intraday and instead reclosed in time, Hunan Development’s positioning could have been nailed down as the leader for the third-wave expectation. But on Thursday’s intraday, the split in capital kept happening, and only at the close did Hua Dian Liaoning Ener finally break. This path couldn’t form the market’s third-wave expectation-based trading. Following that, it was more continued split on Friday. Henan Energy Holding, which was seeing the bottom and stabilizing, actually lifted the board first—and today it directly entered the pullback.

So you can see that capital leaned more toward Hunan Development rather than Guangxi Energy and JIn Kong. We shared last Thursday’s intraday on this already. Hunan Development’s positioning is crucial, but most people’s perspective was actually on Guangxi Energy. In that situation, Monday’s pullback would be easy to foresee. Unfortunately, going forward we need to see whether after Hua Dian Liaoning Ener stabilizes and stops the fall, the sector can start another wave—meaning, “start over,” re-ferment a new leading trend, or cross over and hold the group.

2. Core of the sectors
(1) Power
Bottoming anchored to Hua Dian Liaoning Ener
Today’s sharp low open led the whole sector straight into a pullback. The next key is whether it can stop falling. Henan Energy Holding’s first pullback lasted for two days. On the third day, it repaired. The sector has now already been traded up to high levels. Without subjectively assuming whether there will be a third wave, we only look at the strength of the repair.

Bottoming anchored to Henan Energy Holding
Both top-theme leaders gapped down together. In the intraday session, although Henan Energy Holding resisted, it ultimately also fell back to the limit-down board area, tightly封住 the drop. If you consider the magnitude of a short-term pullback, it’s very clear: Henan Energy Holding already completed a divergence move last week. In the next round of power-sector repair, Henan Energy should also, as it should, be the priority for repair. Leave it to friends who like to bet on repair!

Board-building gets hit hard: Guangxi Energy
This weekend’s ferment stock had too much heat. This morning the sector’s sentiment was so bad that it was actually bold enough to pull straight into a limit-up board against the trend. In the end, capital exploded it and it fell back into deep water. Such a move is actually also a good one. Because if the sector doesn’t “start over” with a re-ferment, it will very easily truly pull back. Instead, if it sells off decisively like that, the next wave is also easy to ferment into a new leader again. The node of the old direction is the trigger—when you try to反包 and cross over again, you also need to look at how the entire theme’s core responds tomorrow!

(2) Pharmaceuticals
Sentiment leading: MinnoV a
Today belonged to capital forcing a continuation for the same direction. It ultimately advanced to a 5-board streak. Last Friday’s sector was the climax. Some back-row names also followed the schedule to split—Wanfangde failed to晋级. Most of the second boards were also quite bad, and first boards still had some support. Going forward, we need to see how the power sector repairs. For tomorrow, the best for the pharma direction is a divergence. At this time-node, expectations are too “obvious,” and that often leads to a decline in follow-through.

Trend core: Jiu’an Medical
The earliest move was actually led by this stock starting the trend first, bringing the sector out into consecutive boards. This type of initiation is beneficial for market speculation. First, for the medical sector, the capacity isn’t a problem. Other than having a bit of “defensive” attribute, there’s basically nothing wrong. The chips are also at low levels. Trend starts first; after the exhaustion of the consecutive-board force, there’s hope that it can again转为 a trend. In the comment section today, friends also mentioned paths like Henan Energy Holding. So going forward, paying attention to the pharma direction is still relatively important—just wait to see the next power-sector reaction.

(3) Commercial aerospace
Leader #1: Aerospace Development
In the early stage, as the sector leader, this wave has been rather suffocating. Even Shenjian Co. can bounce back for three boards, but Aerospace Development keeps surging up and then falling back every day, and it’s still being suppressed by the 60-day line. However, with the logic of “SpaceX industrial chain,” this stock’s logic is indeed a bit off. But later, the sector’s main backbone positioning is still Aerospace Development. If this stock sells off hard, then the expectation for the speculation will need to be reduced.

Trend rebound: Shenjian Co.
Intraday, the board on the sector has only this one stock that’s still relatively decent. The other core names are basically pretty bad; some even do high-level range trading. Tomorrow’s three-into-four is a very extreme price point. On top of that, the aerospace direction’s move also slightly locks horns with the market’s theme sentiment divergence. If it can’t separate, it will be impacted by the power direction—meaning the intraday strength of commercial aerospace will be reduced when power repairs.

The other logic stocks: Zeng Yi Technology, Western Materials, and Elasticity West Test and Measure. Going forward, you need to be wary of a “two-headed expectation.”
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3. Sector analysis**

1. For the power direction, we’ll just see how strong the market’s repair is. Today’s move has already established that it’s a pullback. If it can repair with an above-expected back-cover, or keep building complete strength from low levels, then you can give it the expectation of a third wave. Without these signals, don’t become bullish just based on personal opinion. In the short term, the chips are already at high levels, and the risk-reward ratio for opening positions is already not very favorable. If you like buying into repairs, going forward you can consider looking at the core names; more importantly, you should focus on the new directions!

2. For commercial aerospace: in the comment section today, I talked about this. The best participation point for this theme is when power is about to diverge, and when capital begins to发动 first. Buying again intraday is obviously more passive. You can see that although the sector is relatively strong, if you enter as the first mover, the boards are still very messy from an emotions perspective. Earlier, expectations for commercial aerospace were supposed to be detached from power’s influence, and today it coincidentally strengthened precisely during power’s pullback. This kind of move is still a bit “sick.” Going forward, we still need to see if it can separate from power. Personally, I’m still more inclined to expect this direction as a transition.

3. Pharmaceuticals: the market has a “ming-pai” node direction. Previously, the battery direction first took over and absorbed the divergence. Today that was realized and兑现. The front-runner MinnoV a’s超预期 advancement provides reinforcement for the pharma sector’s tier structure. But there’s still a bit of a gap. Wanfangde ultimately failed to封 the涨停. The first-board names also had some assists. Going forward, the highlight of this direction is whether it can continue to strengthen after power repairs. Also, today’s construction engineering direction was collectively lifted by quantitative trading, but capital didn’t approve it. For the new direction at the stop-fall node, it should still be led by pharmaceuticals.

4. Other directions include solar power, straits, military industry, fiber optics, and so on. They essentially play on rotation—each direction has its own辨识度. For example, in solar, Zhongli Group; in straits, Pingtan Development; in military industry, 热内 strength is the worst. Fiber optics is the direction that resonated with the index first, but for emotion-traders, this direction is the one you miss out on by being late.

4. Tomorrow’s trading plan
We still need to continue observing the theme’s divergence and repair, and then decide whether to open positions!
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