3.9 Review: Oil and gas surge hits a collective setback, power grid continues to party, lobster rises

The three major indices opened lower and then sharply rebounded in a deep V-shape, completing a technical pullback, with trading volume expanding to 2.6 trillion. The power grid sector showed sustained strength amid divergence, becoming the strongest main theme of the day; the oil and gas sector opened high but declined sharply, trapping and killing off chasing funds; the lobster concept saw a resurgence of capital inflows in the afternoon. The market is expected to stabilize in the near future, with focus on the continued strength of the power grid theme and the emergence of new core stocks. [Taogu Ba]

Following the Trend
The indices opened lower due to external influences, then experienced a sharp decline at the open before oscillating and closing higher, ultimately ending with slight declines across the three major indices. This formed a technical pullback within the day, with the Shanghai and Shenzhen indices, as well as the average stock price index, rebounding after testing the 60-day moving average. Trading volume for the day was 26.475 trillion, an increase of 4.474 trillion, with some panic at the opening. The market is expected to continue stabilizing moving forward.

The power grid sector demonstrated sustained strength, while the oil and gas sector was quite disappointing, and the lobster concept strengthened notably in the afternoon.
In the power grid sector, despite some divergence, it showed good persistence today, with 16 stocks hitting the daily limit, amounting to 23.588 billion in limit-up gains. The momentum was not weaker than last Friday. Shun Na Co., Ltd. upgraded to 4 limit-ups with high turnover, Hanlan Co., Ltd. was eliminated, Meili Cloud advanced to 3 limit-ups, with 2 limit-ups for 4 stocks, and 10 stocks hitting their first limit-up. Leading stocks like Chint Electric and Southern Power Grid Energy hit the limit-up, and the smart grid index continued to volume up with a new high, maintaining the main upward trend.

The lobster concept, which fermented over the weekend, performed modestly in the morning but gained strength in the afternoon as oil and gas retreated. Throughout the day, 14 stocks hit the limit-up, totaling 36.067 billion in limit-up gains. There were 2 second-limit stocks, with Ningbo Construction leading with a straight-up move, and Tuo Wei Information finishing the day higher. There were 12 first-limit stocks, 7 of which moved up in the afternoon.

The oil and gas sector was the worst today, opening high and declining sharply, with nine stocks hitting the limit-up after the opening auction. Chemical stocks hit three limit-ups, and resource stocks were notably strong. However, after opening, most failed to hold their gains and fell back, with giants like Intercontinental Oil & Gas, CNOOC, and Shandong Moluo all falling back from their limit-up levels. Throughout the day, 28 stocks declined sharply, with 21 in the oil and gas sector and 5 in chemicals. In the contest between resources and computing power, computing power still outperformed.

Market Sentiment Fluctuations
Market sentiment showed clear divergence. After a continuous rise last week, the market shifted to widespread decline, with only about 800 stocks in red during the day, but ultimately over 3,700 stocks closed lower. The number of stocks hitting the daily limit-down also decreased sharply from 74 to 42.

Conversely, speculative sentiment remained relatively strong. On one hand, high-profile stocks like Yunnan Energy, Tongyuan, and Dingguo, which are under regulatory scrutiny, responded positively. On the other hand, thematic stocks showed more sustained strength. Additionally, some leading core stocks in various sectors also delivered good results.

Thoughts for Tomorrow
The overall trend continues to stabilize. First, today’s pullback was completed, and the sharp rebound indicates that the market’s controllers are maintaining the trend during the conference period.

With the trend stabilized, focus shifts to themes. Last Friday, I emphasized the power grid sector, which has continued to show good persistence today. Next, we need to consider the environment for thematic emergence—whether it can further develop into a major main theme, which remains uncertain. Another key point is the rhythm; after a series of large gains, a correction may occur, but in a main upward trend, even corrections will likely be followed by rebounds. The next step is to observe whether a more recognizable core can emerge from the elimination process.

As for the lobster stocks started today, their strength was moderate, with obvious signs of quantitative trading, and future movements may be more stock-specific.

Additionally, style considerations should be linked to the overall market performance. If the market remains volatile, the strength of themes may be limited, and the continuation of concentrated stocks’ performance is likely.

In summary, the current situation has slightly changed from the previously chaotic state, but it is still not a major upward trend. Caution is advised in all actions.

Trading Insights
Today’s auction was relatively weak. To manage risk, most positions were sold at the open—Cosmic Integrated, Aerospace Development, Huagong Technology, and Tuo Wei Information all exited, mostly on the water, some at high prices, some at low.

After the auction, Shun Na Co., Ltd. was bought in at the open.
Tuo Wei Information was sold, then re-entered as the trend strengthened in the morning.

Post-market holdings: Tuo Wei Information, Shun Na Co., Ltd., and Yunnan Energy Holdings.

Data Summary

☑ Disclaimer: The content of this article is solely personal review notes. Any opinions or stocks mentioned are for illustration only and do not constitute investment advice. Please avoid blindly following, trade independently, and be aware of investment risks.
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