Midao and Xungu

Before we begin, here’s a report on this week’s revenue:

There’s an element of luck in gains. During market adjustments, my positions are mainly in Xianglu, GCL, Jinlan, and among long-term holdings, CNOOC has been rising against the trend. Yesterday’s Hailian, and today’s Southern Power Grid, both saw 20cm gains. As everyone knows, I enter the market based on long-term trends and am a veteran of value investing. This can be seen from how long I’ve held my stocks. In Tao County, I might be considered an outsider. I’ve never mentioned CNOOC before because it’s a long-term position focused on fixed income. When talking long-term, I consider valuation, moat, dividend yield, company revenue, etc. But that’s a side note.

Today I won’t discuss logic. Let’s talk about how to analyze the market: 1. Don’t trade what you don’t understand: Do thorough pre-market research. Don’t follow the crowd blindly, especially beginners. Don’t chase after a rise just because it looks good; luck isn’t guaranteed, and poor timing can lead to big losses. Prepare carefully before the market opens. Most of the work is done outside the market, especially since I’m involved in energy, chemicals, and innovative pharmaceuticals. Sometimes I need to write research reports, and more often, I interact with players across various industries and read a lot of research reports. From my past trades, you can see my style clearly—I won’t list them all here. Feel free to check my previous posts when you have time. 2. Volume precedes price: this is the most basic market indicator.

On February 11th, Hailian broke above the 30-day moving average with increased volume (more than double), which was a rebound. The next day, there are two likely scenarios: either a quick rise followed by a pullback, or a volume breakout past a previous high. A brother asked how I chose it. Referencing the first point, it has a merger logic with Hangqi, combined with AI, power, and energy sectors, with dual main businesses, and driven by capital, sentiment, and timing resonance. So, you open a position when it breaks new highs, and then manage your positions gradually! 3. Answering a brother’s question: Does Runtu still hold? Despite continuous price increases in dyes, Runtu has been sideways. Is it a sign of stagnation? First, look at the chart:

1. Runtu has recently been reducing positions, trading sideways at high levels. Has the price increase logic disappeared? Actually, the logic of price increases still exists, but it also depends on sentiment and expectations. Compared to Jinniu, Runtu didn’t have a significant correction before doubling from the bottom, whereas Jinniu experienced two major shakeouts in the first two waves. In the third wave, with two volume-reducing straight-line moves, it balanced at high levels, changed hands, and hit new highs. These past few days, everyone’s costs are similar, which is beneficial for future trends. Today’s early session saw a recovery in the chemical sector, with Hongbaoli leading the way with a limit-up, and Jinniu hitting a new high. The buy points within the pattern are now in place. Also, it’s better to create new rather than rely on old ideas. As for the future, let the market decide!
   A side note: When everyone comes to Tao County, they’re initially seeking the Way and enlightenment, but most end up just chasing stocks—copying others’ trades, catching the trend today, overnight gains tomorrow, and trend reversal the day after. From seeking the Way to chasing stocks, eventually, they fade into the crowd. Perhaps, the more losses you suffer, the closer you get to the core!