A Song of Ice and Fire - Index Soars, Continuous Limit Up "Overcoming Tribulation"

Deep Review and Routine Summary of Today’s Observations;

Yesterday’s low-profile focus on Zhitai New Materials, ongoing observation;
Focus on XinHua Department Store during intraday;
Ongoing observation of Quxing Toys;

Deep Dive: Market Sentiment Review
$1
February 4, 2026 (Tuesday)

Conclusion: Market sentiment shows an extreme split of “ice and fire,” with a V-shaped index reversal masking a fierce elimination race on the thematic side. Although the Shanghai Composite Index rebounded above 4100 points, boosting bullish confidence, short-term funds are engaged in brutal “high-low switching” and “weak-strong leaving.” The success rate of consecutive limit-ups is grim (especially only 14% for first to second), market aesthetics shift from “broad net casting” to “meticulous carving,” and capital is highly concentrated in sectors like photovoltaics and coal, while high-level AI and follow-on stocks are abandoned. While sentiment has recovered somewhat, it remains a “weighting platform, thematic differentiation acting out” trial-and-error period.

1. Core Data and Sentiment Diagnosis
1.1 Overall Market Performance
Index performance: Shanghai Composite up 0.85%, closing at 4102 points; Shenzhen Component up 0.21%; ChiNext down 0.4%.
Volume change: 2.48 trillion yuan, shrinking by 612 billion yuan from yesterday (pre-holiday effect, funds becoming cautious).
Number of advancing/declining stocks: 3,141 advancing, 1,960 declining.
Limit-ups/Limit-downs: 68 non-ST stocks hit limit-up, 5 limit-down (loss-making effects mainly concentrated in high-level consecutive limit-up stocks and AI stocks).

1.2 Short-term Sentiment Indicators
Consecutive limit-up success rate: overall very low.
First to second: 9 successful / 63 failed, about 14% success rate (fierce elimination race).
Second to third: 2 successful, success rate 40%.
Above third board: 2 successful, success rate 40%.
Market temperature: Warm (index is red but individual stocks are differentiated, mainly due to the survival of the fittest among limit-up stocks).
Breakthrough rate of limit-up stocks: 21.84% (funds are not strongly committed to sealing the boards, divergence is significant).
Performance of yesterday’s limit-up stocks today: average gain 3.4% (limit-up stocks with 3.11% gain), indicating that stocks that hit the board yesterday have some premium today, but not high.

1.3 Sentiment Summary
Market is in a stage of “index stability, emotional oscillation.” Funds use weights (financials, coal) to stabilize the market, masking thematic shifts. The success rate of consecutive limit-ups remains low, with 14% for first to second, indicating high trial-and-error costs. The market has entered a “mid-level oscillation” betting period.

2. In-depth Analysis of the Limit-up Tiers
2.1 Current Limit-up Structure
4-board: Mingdiao Co. (AI applications), Hangdian Co. (Optical Communications).
3-board: ShunNa Co. (Data Centers), Minbao Optoelectronics (Overseas/ M&A).
2-board: CIMC Group (Commercial Aerospace), Yinlun Co. (Robotics), Julitec (Aerospace), Tiantong Co. (Photovoltaics/Aerospace), Shuangliang Energy-saving (Photovoltaics), Jingtou Development (Real Estate), Hanjian Heshan (Building Materials), Guosheng Technology (Photovoltaics), Zerun New Energy (Photovoltaics).

2.2 Tier Characteristics Analysis
High resistance: The highest limit-up is 4-board, with all attempts at 5-board failing (WanFeng Co. hit limit-down), indicating the market’s reluctance to push for year-crossing gains, with funds preferring “small steps and quick moves” at mid- to low-level boards.

Attribute grouping: Limit-up stocks are highly concentrated in “new productive forces” and “pro-cyclicals”: photovoltaics (Shuangliang, Guosheng), aerospace (CIMC, Julitec), infrastructure/overseas (Minbao, Jingtou).

Risks: Mingdiao Co., in the AI sector with counter-cyclical adjustments, faces significant correction pressure; Hangdian Co., in optical modules, is relatively resilient.

2.3 Focus for Follow-up
Pay close attention to the PK race from 3 to 4 boards; whoever advances to 5 boards on Thursday will be the new cycle’s leading rally leader.
Observe whether the dual 4-board leaders (Mingdiao, Hangdian) can break the 5-board curse.
Risk warning: beware of high-level stocks like WanFeng Co. that may fall back after hitting the limit-up, causing negative feedback in their sectors.

3. Hot Sectors and Core Stock Comments
3.1 Photovoltaic/Space Photovoltaic Sector
Strength rating: (Today’s strongest)
Number of limit-ups: 13 (including Shuangliang Energy-saving, Guosheng Technology, both with consecutive limit-ups).
3.1.1 Core Logic
Catalyst: Musk’s team inspecting Chinese photovoltaic leaders, coupled with rumors of breakthroughs in “space photovoltaics,” triggering fund rushes.
Defensive attribute: During AI pullback, funds flow into upstream photovoltaics with performance support.
3.1.2 Core Stock Analysis
Shuangliang Energy-saving / Guosheng Technology: 2 consecutive limit-ups, core targets in “space photovoltaics,” with healthy volume.

Minbao Optoelectronics: 3 consecutive limit-ups, though in photovoltaic equipment, with core logic involving “M&A restructuring + overseas expansion,” making it more recognizable.
3.1.3 Trading Strategy
Perspective: Early stage of main upward wave, suitable for low buy-in at the front lines.
Rotation path: Funds shift from AI hardware to hard tech sectors like photovoltaics/storage.

3.2 Coal Sector
Strength rating:
Number of limit-ups: 13 (all first limit-up).
3.2.1 Core Stock Analysis
Yankuang Energy / China Coal Energy: Major stocks hit limit-up, indicating dominance by institutional and quantitative funds, not purely retail hype.
3.2.2 Sector Characteristics
Sudden positive news: overseas supply contraction + domestic supply guarantee policies, viewed as defensive sectors by funds.
3.2.3 Trading Strategy
Suitable for lurking and accumulation, avoid high-level continuation, as the next day often sees profit-taking and pullbacks.

3.3 AI and Application Sector
Strength rating: (Adjusting)
Number of limit-ups: 2.
Core logic: Affected by the decline of US software stocks, AI application stocks (media, computing power) in A-shares are collectively pulling back.
3.3.1 Core Stocks
Mingdiao Co.: 4 consecutive limit-ups, in AI applications. Despite today’s sector plunge, it managed to hold 4 boards, showing some funds are counter-cyclically building “crossing dragons,” but with high risk.

Hangdian Co.: In optical communications (computing infrastructure), 4 consecutive limit-ups, with a more solid logic than pure applications.
3.3.2 Trading Advice
Avoid stocks that merely follow concepts; focus on core mid-tier stocks (like optical modules) for stabilization opportunities.

4. Overall Market Sentiment Analysis
4.1 Sentiment Cycle Positioning
The current market is in the “initial recovery after a tide retreat” phase. The index recovers faster than sentiment, with funds retreating from high levels (AI) and shifting to low levels (photovoltaics, coal).
Risk point: “One-day trading” in shrinking volume markets, with high-level limit-up stocks like WanFeng Co. acting as the “kill switch.”
Opportunity point: First dips in new low-level themes (space photovoltaics, commercial aerospace).
4.2 Fund Behavior Characteristics
Weighting support: Using coal and liquor stocks to stabilize the index, masking thematic shifts.
High-low switching: Funds are no longer chasing high-level stocks, instead exploring low-level stocks with news triggers like photovoltaics and aerospace.
4.3 Sentiment Indicator Interpretation
Extremely low success rate (only 14% for first to second) indicates very high trial-and-error costs, with the market entering a “quality-focused” mode where only stocks with the strongest logic can advance.

5. Future Market Views and Trading Strategies
5.1 Major Direction Judgment
Although the Shanghai Index has broken above 4100 points, volume has shrunk, so short-term will likely see wide-range oscillation, with increasing stock differentiation. Funds will focus on “performance certainty” and “unexpected industry news.”

5.2 Specific Trading Strategies
5.2.1 Avoidance
Avoid high-level limit-up stocks without performance support (especially those that hit the board or fall to limit-down today).
Avoid follow-on stocks driven purely by sentiment without logic.

5.2.2 Focus Areas
Pay close attention to the sustainability of “space photovoltaics” and “commercial aerospace.”
Monitor the M&A and restructuring sector (Minbao Optoelectronics) for demonstration effects.
Observe whether optical communications (Hangdian Co.) can develop independent trends.

5.2.3 Risk Control
Manage positions carefully, avoid full positions betting.
Only focus on front-line core stocks supported by sector effects, abandon trailing follow-up stocks.

6. Summary
Today’s market is a typical “index setting the stage, stocks performing the show, but the storyline has changed.” The breakthrough above 4100 points is encouraging, but short-term sentiment has not fully peaked; instead, it’s experiencing brutal survival of the fittest. Funds are no longer blindly chasing highs but are shifting to low-level sectors with strong logic (Elon Musk’s China visit, space technology). At this moment, avoid blind optimism, follow the flow of funds, focus on front-line core stocks in new main lines like photovoltaics and aerospace, strictly control positions, and wait patiently for the market to establish new leading directions in shrinking volume.

Tomorrow’s core strategy: Focus on the PK race from 3 to 4 boards, look for divergence opportunities in photovoltaics/aerospace, and avoid high-level AI correction risks.

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【Important Notice】: The above is for idea sharing only and does not constitute investment advice. The market involves risks, invest cautiously!