Pullback with reduced volume! The 3900-point level was regained and then lost again, and the market has returned to a choppy bottoming process!

Today’s Key Stocks: [Taoguba]

1. During the morning auction, there was a significant divergence in electricity stocks, so Shao Neng Shares could be sold directly during the auction.

2. Huadian Liaoning Energy opened too high and continued to accelerate, so it can also be sold in batches at the open.

Today’s Market Overview:

Today, the market was once again cooled down! After two consecutive days of strong rebounds, A-shares chose to consolidate with lower volume today. All three major indices closed lower, with the Shanghai Composite down 1.09%, closing at 3,889 points. The 3,900-point level, which was just recovered yesterday, was lost again; Shenzhen Component fell 1.41%; ChiNext dropped 1.34%. The total market turnover shrank to 1.94 trillion yuan, down more than 236 billion from yesterday, a typical “volume contraction for a pullback.” Individual stocks also mostly declined, with over 4,400 stocks falling and only about 900 rising, with a nearly 1:5 ratio of gainers to losers, indicating a clear cooling of market sentiment.

Today’s market pattern is a typical “high-low switch + defensive focus.” Funds withdrew from the tech growth sector that surged yesterday and shifted into low-priced and defensive sectors.

The sectors showing relative strength (low valuation + resources): old energy and lithium batteries. Coal, oil, and petrochemical sectors made a comeback, with Blue Flame Holdings hitting the daily limit. The catalyst was mainly the rise in international oil prices. Meanwhile, energy metals (lithium ore) and the battery industry chain remained strong throughout the day, with Rongjie Co. hitting three consecutive limit-ups. There are two reasons behind this: first, the impact of Zimbabwe’s lithium concentrate export ban may be more than expected, boosting lithium prices; second, funds are seeking low-positioned sectors with price increase catalysts for defensive purposes.

The heavily affected areas (profit-taking): tech growth and finance. Yesterday’s star sectors like computing hardware (CPO), semiconductors, and communication services became the main targets for selling today, with Guosheng Technology hitting the limit down. Additionally, insurance and precious metals sectors also saw significant adjustments. This clearly reflects that after a continuous rebound, funds took profits in high-level tech stocks, and market risk appetite quickly declined.

Key Market Signals:

Volume contraction on decline indicates a healthy correction: trading volume shrank significantly, suggesting today’s decline was mainly a natural pullback after reduced selling pressure, not driven by panic selling. It’s a typical technical pause after a rebound.

Sharp drop in consecutive limit-ups, sentiment waning: the maximum consecutive limit-up streak was compressed to three, and yesterday’s high-flying Huadian Liaoning Energy failed to sustain a 9-day streak, indicating short-term speculative sentiment is retreating rapidly, and willingness to chase high is weakening.

Synchronized caution from domestic and foreign capital: main funds net outflowed over 77 billion yuan throughout the day, and northbound funds also saw slight net outflows. Before the key level (3,900 points), both domestic and foreign investors chose to stay on the sidelines.

In the coming days, focus on these key points:

How strong is the support at 3880 points: the Shanghai Composite dipped to 3880 today. Whether this level holds will determine the depth of the short-term correction.

Can trading volume rebound: for the market to resume upward movement, turnover must return above 2 trillion yuan. Otherwise, it may continue to fluctuate below 3,900 points and form a bottom.

Can the main themes re-consolidate: today’s leading sectors—coal and lithium—are more defensive and rotational, lacking strong industry logic. Watch for new, consensus-driven themes to emerge.

External geopolitical disturbances: the “Ongoing Saga” of US-Iran negotiations continues, and any sudden news could again impact global market risk appetite.

Core Trading Strategy (Defensive Counterattack, Less Trading):

Overall approach: reduce positions and wait for stabilization. As the market enters a consolidation phase, trading becomes more difficult. Lower total positions to 30-50%, keep cash reserves, and patiently wait for clearer signals.

Focus areas: low valuation defensive stocks and those with clear earnings prospects. If you’re eager to trade, do so with very small positions—preferably in high-dividend, low-priced coal and banks, or lithium mines with clear price increase catalysts. But remember, don’t chase highs—buy low only.

Avoid all high-level sectors: especially the tech growth sectors like semiconductors, communications, and photovoltaics that led today’s decline. Don’t rush to bottom fish in a downtrend; the risk of catching falling knives is high.

Be patient and avoid frequent trading: in a volatile market, chasing gains and cutting losses often leads to losses. Reduce trading frequency, wait for good setups, and if uncertain, stay on the sidelines.

Daily Self-Reflection Questions:

1. Which stock was your best performer today? Did you participate? If not, why?

2. Which stock do you think was the best in the market today? Is it the best in your own model? If not, how can your model be improved?

Growth Philosophy:

My personal belief is “first fish, then fishing.” Learning to fish isn’t something you master in a week or a month, but catching fish gives you the capital to make mistakes and learn. The first step in fishing is improving your aesthetic judgment, not just technical analysis, because without a complete model, relying on a single indicator is more likely to be superficial. Cultivate your aesthetic sense, focus on core principles, and experience the high premium of prediction and deduction. As the saying goes: “Read three hundred Tang poems thoroughly, even if you can’t compose poetry, you can recite.”

For learning, you either learn correctly—making your efforts more effective—or explore on your own. The worst is starting to learn during the novice period and being misled into junk knowledge. Many newcomers use a set of terminology without understanding where they learned it, and often what they learn is mostly wrong. Sometimes, when you try to correct them, they stubbornly cling to their misconceptions—because they’ve been exposed to too much bad information, and their thinking is rigid. They can’t understand the worldview of stocks; everything is conspiracy theory, luck, and backtesting is useless. They just pick stocks blindly, believing success or failure is predestined.

I believe “first fish,” because once people start catching fish, they will naturally correct their understanding of the market and admit that their previous flawed methods were wrong. If you follow for over a month, you’ll notice your stock-picking aesthetic gradually improves—this is the effect. One day, you’ll realize that your view of the market has changed; all K-line patterns and stock movements become clear. Enlightenment is built on a solid foundation of cognition and daily practice.

So, the direction of learning is very important. If you lack innate insight, you need to follow others. There are countless ways, and you will find the one that suits you. Welcome more friends to join the journey of stars and the sea!

Enlightenment Post:
Thanks to @TuixueChaoA股 for your encouragement!

Wishing everyone who likes and supports us a long-lasting bull market in 2026!

Disclaimer: This article shares personal trading insights for recording investment growth. The stocks and opinions mentioned do not constitute investment advice. Operate at your own risk. Please maintain independent thinking. (Stock market risks, invest cautiously.)