4.1 Review, chicken out A

Two markets’ trading volume was 2.01 trillion yuan; compared with the prior trading day, it only very slightly increased by 20 billion yuan. Last night, overseas U.S. stocks surged sharply. Today, in Asia-Pacific, Japan and South Korea are seeing a big rally. But our A-share market is still that same kind of behavior: when the outside markets rise, a high open is bound to get smashed; conversely, if the outside markets crash, it actually shows remarkable resilience. If you want to survive in this market, you can only learn systematic trading strategies and buy the dip from other people’s stop-loss selling. Remember: don’t let quantitative traders become the bag-holders. Put away that outdated “leader trading” playbook. [TaoGuBa]

Commercial aerospace: after the excitement peaked the day before yesterday, yesterday many stocks in the back rows surged and then fell back. Even in the afternoon into the close, they still pulled the key “divine sword” off the board. Today the premium given to the “divine sword” is pretty ordinary. The strong performers yesterday—Shunhao and Julí Suojù—also moved only so-so. The funds cashed out right at the open. As it rose a bit more, it was almost throughout the day underwater. The good news is that it shrank in volume and closed above the 5-day line. There’s a two-day split in commercial aerospace: today’s divergence can also be considered relatively healthy. On April 3rd, Tianbing Technology’s Tianlong-3 has a launch task. Let’s see whether, if tomorrow morning continues to extend this divergence, funds will dip-buy and gamble on a rotation back.

Electric power: this sector has been in a retreat for a few days. Yesterday, quantitative strategies反核 at a low level and tried to rescue with an intraday first board. Funds pushed up Huanadian Liaoning and Huanadian Energy significantly. But yesterday’s strong performance turned into collective slaughter today. It has the vibe of “Hulùwá saving Grandpa”—for example, yesterday’s strong names like Jingyùn Tōng, Zhōng Mǐn Energy, Tùorì Xīnnéng, Shēn Nán Electric A, and so on, almost none of them offered much of a premium. Xīntài Shān: yesterday it saw the limit-up after being under pressure (closing back above), but today it was still pressed down to the daily limit floor. Toward the close, there was again money that bid up at the floor with a first move. Tomorrow you can see whether Xīntài Shān can replicate yesterday’s走势 again. Electric power is similar to commercial aerospace: after that, there’s also some expectation of further fund rotation back.

Innovative drugs: it was very obvious in the early session—funds went to buy the 4-board momentum play, Jīn Yao Pharmaceutical. At the open they pulled a 秒板 in Jiǔ’ān. And after the early index gapped up very high, most funds didn’t think today’s index could keep gapping up and running; instead, they immediately switched to buy medical care stocks in an inverse way. Jīn Yao advanced to a 4-board. Aōng Lìkāng got its 10cm first board. Guǎng Shēng Táng got its 20cm first board. These are all veteran performers from before. Wànfāngdé’s 5-day line continues its upward trend. Although it didn’t hold the lock at the close, it also didn’t experience huge additional volume. After the big rally in innovative drugs today, there are still many catalysts later on, so you can continue to watch. But after today’s big rise, it will be much harder for the late hand to chase higher tomorrow. Just be patient and wait for a pullback.

Yesterday’s strong high-speed rail and Zhangxue locomotive, etc.—today nobody wants them directly. If you seriously look at the “chain-board money-making effect,” there are very few chain boards today. Even the premium for today compared with yesterday’s first-board limit-up is extremely low. On the contrary, the rate of failed boards today is extremely high, which shows sentiment isn’t good. In short, in this market right now, “continuation trades” really are something even dogs won’t play. Learn to buy the dip from other people’s stop-loss selling, then wait for quantitative strategies to pump and lift the sedan for a distribution—only that’s the truth.

**The above viewpoints are for personal record only and are for reference purposes only. They do not include any investment advice. **

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** $Shenjian Co., Ltd. (sz002361)$ $Wanbangde (sz002082)$ $Jinyao Pharmaceutical (sh600488)$ **