3.24 Reflections After the Leader Emerges - Computing and Electricity Synergy Seems to Have Unveiled a New Pattern

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First, a market overview
As usual, let’s review the morning thoughts first. Yesterday’s hottest event was Huang Mao unilaterally announcing that he and Langzi are already in negotiations. The result was a sharp drop in oil futures, but Langzi quickly responded, saying there was no direct or indirect communication. Then oil futures rebounded from the lows. So, the world is just a makeshift show. But here’s the key point: whether from oil futures performance or last night’s US stock market, the news of US-Iran talks eased overall panic sentiment. However, due to uncertainty and previous US breaches of trust, financial markets are not strong. US stocks surged then retreated, and other markets are even less confident. Currently, the Dow and Nasdaq are both in short-term downtrends with no signs of stabilization. From this perspective, tech stocks are definitely unreliable; any rebound is a sign to exit. Because even major US tech giants can’t hold up, let alone small-cap A-shares and concept stocks. Here’s a tip: before the A-share market opens, pay attention to Japan and South Korea markets, as they are part of the Asia-Pacific region. Their performance often reflects that of the A-shares. Since Japan and Korea opened high and then declined, today’s A-shares are unlikely to have a strong rebound.
Based on pre-market analysis, today’s weak rebound suggests exiting, while a strong recovery with volume and resonance indicates a buy signal. Yesterday’s late session saw an early move in Meiliyun, expecting either a high open with a strong rebound or a choppy session depending on the market’s mood. But the market opened high and then declined, with no big orders pulling it back when breaking the five-day moving average. It then sharply recovered, even touching the limit-up at one point.
So, in a quantitative market, sometimes it’s really hard to beat others. Their data shows retail buying and selling, but retail investors have no idea whether they are buying or selling at a profit or loss.

Market sentiment: I mentioned DeepHuaFa as a way to identify independent top boards with high recognition. Today’s focus is whether Huadian Liaoning can continue breaking through. As long as it hits the limit-up with unusual activity, that’s the first breakthrough point. If it’s with high volume, it needs to be confirmed with a break the next day to verify today’s first board. If it breaks the limit directly, then today is a break point. Overall, today’s most probable scenario is the first board, but the stronger the breakout, the better. Also, note that if the first boards are mainly power-related stocks, it can limit imagination and create resistance. So today’s main focus should be on new themes appearing in batches. From the market, besides military industry, there doesn’t seem to be much, but military stocks are mostly old faces, similar to yesterday’s YuShu Robotics, mainly for recognition and arbitrage.

Relay stocks: Today, Huadian Liaoning’s bidding was below expectations, likely clearing some panic selling. Based on yesterday’s performance, a large gap-up open was expected, and a flat open might be seen as underwhelming. But note that today’s seven boards are unusual, and external expectations are somewhat aligned. So, a flat open can be seen as calming panic, providing a good entry point for later. All this depends on whether they advance or not. If they open high and then drop sharply, it indicates underperformance.

Mid-cap stocks: Today, most are used to block declines, including the highly anticipated Dongfang Xinneng, the top energy stock. It opened with a one-word bid and then dropped sharply, indicating a high-flyer crossing a hurdle, losing support. Because high-flyers are recognizable, and low-priced stocks with good potential can be used for bottom-fishing, mid-cap stocks are now less likely to be the main focus. They tend to follow the trend rather than lead. Yesterday’s analysis mentioned Zhongli Group as Moen’s positioning, so today’s big orders for it suggest strong support, confirming the Chia-Fu Moen model. Chint, on the other hand, had a one-word bid but didn’t even attempt to rise, which is somewhat excessive. It shows that yesterday’s trading was mainly arbitrage-driven, and once sentiment fluctuates, they get abandoned.

One-to-two stocks: The success rate today is quite low, mainly because yesterday there weren’t many first boards, indicating the timing isn’t right. Liaoning Energy opened high and then quickly hit the limit, supporting Huadian Liaoning. Despite expectations of a good bid, the market maintained strength, with some recognizable stocks like HeFeng Moen’s Sanmu Group, which independently hit the board during a Da Vinci sector rally, later enjoying accelerated gains. The main dilemma during bidding was between Tuori and Xinri; Tuori’s turnover was high, and it was somewhat old, so Xinri was chosen. But Xinri was then hammered down. Reflecting on this, it’s probably a logical flaw: rising oil prices led to electric two-wheelers showing off, but as oil prices fell, the logical choice should be Tuori. For such non-mainstream strategies, it’s better to abandon them to avoid buying junk.

Finally, today’s outlook: The key point is Huadian crossing the hurdle, with mid-cap stocks not supporting, risking a big decline. Currently, the focus is on leading stocks, and today’s batch of first boards for supplementary gains is a dispersive process. These supplementary gains will reinforce the recognition of leading stocks, or if they open with a one-word bid, it increases expectations for the leader. Huadian Energy was blocked yesterday, so logically it should open high and push higher today. But today, Shaoneng and Hanlan are strong, while Huadian is weak, suggesting that quantification is deliberately creating divergence in Huadian Liaoning. Not only Huadian Liaoning, but the entire sector is using this approach, which will be summarized later.

Second-to-third boards: Zhongli’s third batch of top boards will support Huadian Liaoning, but Chint’s approach is somewhat weaker than expected. The first batch of one-word bids today was to observe whether yesterday’s visit to Xiong’an New Area stimulated Beijing stocks; no bids appeared, so it’s a no. The second is whether Aima and Xinri turn from weak to strong; Xinri clearly shifted from weak to strong today but was still abandoned.

Market bidding info: The largest bid was for Haitan Shares, indicating Sichuan, environmental protection, and photovoltaics. Zhongli’s second-largest bid confirms a strong support level. If it’s DeepHuaFa, then Chint benefits, but support levels from long ago have been seen before. Beijing Ke Rui’s positive opening with a one-word bid was not realized, indicating some issues with the energy sector’s bidding strength, likely fearing a high open and tech sector impact. The Xiong’an news was not recognized; the big bids seen are energy-related. On September 18, Zhongli’s largest bid suggests no new themes or signals, just a general market rally. Zhongli’s biggest bid points to Chint and Huadian Liaoning. On September 19, bidding was average, with few large orders, indicating a market-wide rally aimed at broad recovery rather than aggressive attack. The initial boards lacked capital to lead the charge, so the market was mainly a fan rally.
After September 20: I looked at ReScon’s premium, indicating limited enthusiasm for AI hardware. If they want to develop optical communication, ReScon should open five points with a quick board, which would be a clear signal. But yesterday’s brave stock had low premium, showing that big funds are only weakly rebounding the market, not strongly. Under this expectation, today’s weak tech recovery is a point for exiting. Without confidence in tech, focus shifts to whether new themes in computing power or low-priced resonance emerge. Xineng Taishan, with fiber optics and power grid concepts, is an old player. I initially thought it pointed to Dongfang Xinneng. Chint’s low open suggests they are deliberately not participating, likely to divert funds from Huadian Liaoning. So, Chint’s low open indicates Zhongli is not benefiting from support, and the logical focus remains on Huadian Liaoning.
Market close: Huadian Liaoning suddenly dropped from eight points to a small red, a big win for Dasha. But note, Morning Thoughts said the first focus was Huadian Liaoning, with mid-cap stocks vulnerable to declines, though Dasha could also block Huadian Liaoning, as computing hardware has rebound expectations. So, Dasha should participate by placing orders for potential withdrawal, given logical flaws, preferring to buy nothing rather than wrong. The top bid at open was for Huamin, a photovoltaic stock with elasticity, but Zhongli’s one-word bid benefited, while Dongfang not participating indicated aggressive attack on the energy sector.

Summary of today’s market: To start, I feel that the current quant strategy differs significantly from the pre-2023 commercial aerospace. That sector’s final acceleration phase was a trap, with a lot of stagnation and restrictions. Now, in the computing power sector, there’s deliberate creation of divergence. Whenever the sector strongly recovers or divergence turns into consensus with high intensity, some stocks are deliberately cooled down to reduce recognition. This is the clever part: once divergence turns into consensus and the sector ferments in batches, the only expectation is acceleration. If expectations fall short, it will be hammered. As profits accumulate with continuous acceleration, negative feedback can also occur. It’s likely that GJD is controlling the market, avoiding climax, keeping the market lukewarm daily but not retreating, so it can rebound at any time when the market is weak. Compared to computing power, AI hardware’s disadvantage is that it depends heavily on the market; it has strong attack attributes but no hedging. So, in the current environment of unresolved external risks, computing power is flexible—either attack or defend. It can shift to power to attack or retreat to power for hedging.

Back to today’s market: Before the market opened, looking at Japan and Korea, it was clear that A-shares would likely open high and then decline or open modestly. The main focus then was on whether the main force would push with volume or not. After bidding closed, the market had 5,000 stocks in red, then opened high and declined, with the batch fermentation mainly in computing power. When the market bottomed and rebounded slightly, Tongding Interconnection hit the board, representing AI hardware, with computing power being realized in batches. This led retail investors to believe that computing power was ceding to AI hardware. But note, pre-market said volume is crucial, and avoid pushing sectors like banks and insurance that look good but are useless. So, in the morning, sincerity was lacking; the market mainly aimed to stabilize, with broad gains looking good. But yesterday’s broad decline of over 5% was matched today by broad gains of about 1%, which doesn’t match. From this, it’s clear it’s a weak recovery, with the market rotating to take profits, then moving to other sectors. Such a market means the front line moves to cut losses based on strength, and the back line can’t chase. The sectors with high strength today, besides computing power, are mostly niche sectors. For retail investors, either focus on computing power or avoid other quant strategies.
If it weren’t for Huang Mao’s antics yesterday, today would likely have continued downward, seeking a bottom. Under external interference, today’s broad rebound shows that big funds see no value, so no volume enters, and the market is mainly rotating in the wind. Short-term, new themes are unlikely to emerge because it’s hard to push volume and open high. Huang Mao’s deadline is five days, mostly oscillating until news lands. I didn’t quite understand the market rally in the afternoon; if US-Iran eased, then Japan and Korea didn’t rally, and with volume shrinking, the ChiNext index rose from -2% to positive, suggesting GJD mainly bought ETFs, with sectors like AI hardware performing strongly in the afternoon, others more dispersed.

Review of continuous boards:

1. Seven boards: Huadian Liaoning, Liaoning, green energy, wind power, low-priced, high-flyer crossing hurdles, mid-cap support — all vividly demonstrated today.

2. Three boards: Zhongli Group, Jiangsu, power grid equipment, perovskite batteries, energy storage, small-cap, three boards, no turnover for higher support, supporting high-flyers, also three boards for Huadian.

3. Two boards:

• Xuelang Environment, Jiangsu, restructuring benefits, one-word bid with high volume, waste incineration power, elasticity.
• Liaoning Energy, coal, supporting Huadian Liaoning.
• Tuori New Energy, Guangdong, space photovoltaics, commercial aerospace, green energy, energy storage, average market cap, three boards, Xinri was skipped.
• Zhejiang New Energy, photovoltaics, hydrogen energy, good market cap, less proactive, opened higher than Tuori.

4. First boards: The market lacked volume and resonance, mostly power sector supplementing gains, better to watch the supplemented stocks:

• Xineng Taishan, Shandong, power grid, fiber optics, property management, good market cap, one-word bid, initially thought it pointed to Dongfang Xinneng, but it exploded.
• Haitan Shares, Sichuan, environmental protection, photovoltaics, biomass power, one-word bid, but photovoltaics and Dongfang Xinneng didn’t participate.
• Beijing Ke Rui, energy export, computing power, support for 570 million yuan project, positive but no one-word bid.
• Rongjie Shares, Guangdong, lithium batteries, energy storage, high open in bidding, but then exploded with high volume.
• Huadian Technology, Beijing, fuel cells, hydrogen energy, wind power, nuclear power, energy storage, photovoltaics, good market cap, supporting Huadian Liaoning for a breakout.
• Hunan Development, Hunan, hydro mergers, environmental protection, good market cap.
• Zhongnan Culture, Jiangsu, acquisition of Jiangyin Sulong Thermal Power, coal-to-thermal, cultural media, average market cap.
• Shaoneng Shares, Guangdong, computing power, energy storage, blocked yesterday, rebound today, indicating deliberate support, but Dasha also underperformed.
• Huaguang Huaneng, Jiangsu, hydrogen energy, green energy, photovoltaics, energy storage, excellent market cap, but failed, showing a bit of a market sentiment.
• China Tianying, Jiangsu, green methanol, hydrogen energy, no movement in the bull, mainly environmental protection.
• Yabo Shares, Shandong, photovoltaics, energy storage, green energy, previously a photovoltaic sector leader, no participation, three boards.
• Rongsheng Environmental, Zhejiang, papermaking, environmental protection, invested in YuShu Robotics, yesterday Xuelang didn’t bid, unclear main control intentions.
• Hanlan Shares, Shandong, cables, rope-like, similar to Zhongli.
• Huayin Power, Hunan, old power sector, supporting Hunan Development.
• Minohua, Zhejiang, weight-loss drugs, Zhejiang Pharma supporting Zhejiang’s main rise.
• Huashu Holdings, Sichuan, panels, optoelectronics, carbon neutrality, hinted at DeepHuaFa last time, unsure if this hints at Huadian Liaoning.
• Shitou Shares, Shanxi, e-commerce, photovoltaics, environmental protection, cross-strait, small-cap.
• Tongding Interconnection, Jiangsu, fiber optics, board during batch realization of computing power, indicating continued interest in optical communication and hardware.
• Yaxiang Integration, Jiangsu, cross-strait, semiconductor cleanroom, new high, limit-up hints at storage returning.
• Great Wall Military Industry, Anhui, military, old sector, first limit-up, sector recognition for arbitrage.
• China Ke Chuan, Beijing, publishing, data elements, state-owned cloud, good market cap.
• Aoruite, Northeast, computing power leasing, ReScon’s premium suggests weak enthusiasm, following Northeast Huadian Liaoning, not buying Meiliyun, indicating no strategic position in computing power leasing.
• Yonghe Zhikong, Zhejiang, photovoltaics divestment, tumor radiotherapy, Zhejiang Pharma supporting Zhejiang’s main rise.
• Zhongheng Design, Jiangsu, commercial aerospace, data centers, decent market cap.
• Hengtian Hailong, Shandong, chemical fiber, low-altitude economy, military, chemical fiber rotation.
• Wanbangde, Zhejiang, innovative drugs, Zhejiang Pharma supporting Zhejiang’s main rise.
• Jinhongshun, Jiangsu, auto parts, new energy vehicles, small-cap, decent market cap.
• East China Heavy Machinery, Jiangsu, shipping, GPU chips, small-cap, Jiangdong small players.
• Bohai Leasing, Xinjiang, diversified finance, aircraft leasing, low price.
• Shuhua Sports, Fujian, sports, football, board in the afternoon without themes, indicating no main line in the market.
• Green Yintai, Tianjin, environmental protection, football, turf, following Shuhua Sports.
• Binglun Environment, Shandong, liquid cooling, nuclear power, indicating market environment.
• Galaxy Electronics, Jiangsu, military, energy storage, power grid, commercial aerospace, aero engines, initially dipped then rallied, triggering quant.
• Langsha Shares, Sichuan, national trend underwear, after board many apparel stocks, small-cap.
• Yunnan Germanium, Yunnan, fiber-grade germanium, indium phosphide, following Tongding’s board, expecting AI hardware return.
• Jinan International, Shanghai, PCB, AI hardware stimulus, hinting at “Jin An Security.”
• Changfei Fiber, Hubei, fiber optics, veteran leader, institutional stocks, board strengthening AI hardware expectations, key is US stock performance at night.

Key stock comments

Huadian Liaoning broke through seven boards today, with divergence normal. Bidding low at open was a good entry for later support. No big sell-off at open, then a rally, with limit-up attention. But Huadian Energy didn’t follow and was sold off, reducing attention.

Meiliyun yesterday played the broad market rebound, but opened high and then declined, closing lower, no solution.

Xinri, during bidding, showed a weak-to-strong shift, Fu Ri opened high and hit the limit, Tuori and Xinri chose one; I felt Tuori too old, but Tuori’s three-turnover was still strong.

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