[Red Envelope] Next week, the main battlefield shifts from electricity to lithium mining. The asset allocation path of institutions and speculative funds is revealed!

The market is experiencing volume contraction and a broad rebound; the rotation between leaders and laggards is obvious, and lithium mining has become the new main theme. Ganfeng Lithium is the key holding. Rongjie Co., Ltd. and Dongfang New Energy act as the barometer for sentiment in the lithium mining sector. By convention, as a major sector, lithium mining has the function of continuity and stability.

**[Tao Zhu Ba]

I. Market overview summary

Volume contracts and the broad rebound comes; the switch between high and low is clear, risk appetite is still repairing

From the surface, yesterday’s index seemed to have held steady, but volume didn’t follow through, and internal divergence was serious. Over the whole day, more than 4,300 stocks rose. They look pretty good, but trading value shrank by 90 billion, to only 1.85 trillion. What does this mean? It means incremental funds are still watching from the sidelines; more of the action is being played by existing capital, doing the “high-low switching” game.

From the perspective of sentiment, the rate of consecutive-limit-up advancement fell to 30%. High-level 2-to-3 attempts all failed. This shows that the risk appetite of momentum/relay funds is still very low—they don’t dare to easily top-tick consecutive-limit-up stocks. But yesterday, several 3-day consecutive limit-ups—like Xineng Taishan, Rongjie Co., Ltd., and Meinuohua—also advanced. This indicates that there are still people willing to gamble on clearly identifiable core names. At the same time, previously deeply adjusted low-position sectors like innovative drugs and chemicals moved up, while power stocks that had been performing well before showed divergence—this is the typical high-low rotation.

With 1.85 trillion in volume capacity, it is a near-term “low volume” level and doesn’t support a broad-based rally. For the index to continue pushing upward, this volume isn’t enough. On the 30th—meaning next Monday—it must replenish volume; otherwise, any spike higher is likely to be a selling point. Non-ferrous metals (mainly lithium mining) are the absolute main character today, with net inflows leading. This shows that capital is concentrating toward the upstream of the new energy chain. The power-electronics sector (mainly photovoltaic and wind power equipment) actually sees the most outflows, confirming internal differentiation in the green power industry chain. It also suggests that the stage for “pan-power” to roll out its main story is starting to open up. Like a centipede with a hundred legs, even after it dies, it doesn’t just stop moving—Huadian Liaoning is the sentiment barometer. Capital is rotating from high-position PV and wind to lithium mining, which is relatively lower and has price-increase expectations. Lithium mining will be the main battlefield next week.

Institutions

Institutions are very clear: they bought the big dip in Ganfeng Lithium (303 million). This is institutions’ real money and reflects their recognition of the cyclical strength in the lithium battery industry chain—especially the logic of April production schedules coming in above expectations.

Proprietary traders (游资)

Proprietary traders also acted yesterday. Coincidentally, they overlapped with the institutions on Ganfeng Lithium (two groups of proprietary traders bought a combined 423 million). This is a stock where institutions and proprietary traders are resonating, reflecting market-wide pooled strength; the premium should be high. This indicates lithium mining still has room to play, because when a sector is big, it tends to have continuity and stability. Its “brother,” Tianqi Lithium Industry, is playing the role of a follower this time. Another one is Dongfang New Energy. Two proprietary traders made the main buys of 287 million; the quant strategy (Open Source Xi’an Taihu Road) also bought 100 million as an assist. This shows proprietary traders and quants are searching for a new capacity trend leader—especially ones with new-energy attributes.

Quant strategies

Quant funds are active mainly doing T-trades and adding positions in strong names like Dongfang New Energy. Quants aren’t foolish: they only participate in stocks with popularity and liquidity. This suggests Dongfang New Energy still has something to work with—especially given expectations of asset injections and major asset restructurings. Like how Zhongnan Culture is expected to transform to power generation and plans to acquire 57.30% equity of Jiangyin Sulong Thermal Power, quantifiable stories still hold up. Hahaha.

Even though the index yesterday stayed above 3,900 points and the 5-day line, with the daily KDJ crossing up from low levels, that’s a positive signal. But the 60-minute MACD is still below the 0 axis—this is like the early phase of recovery from a serious illness: when the “illness comes” it’s sudden and severe, when it leaves it fades slowly, and it hasn’t completely exited the ICU. So the index hasn’t fully eliminated adjustment risk; at this position, it will most likely keep oscillating repeatedly. The ChiNext index rose 0.71%, with a chart shape stronger than the Shanghai index—after all, lithium batteries and innovative drugs are both weighted in the ChiNext. A serious reminder: we are currently in the earnings disclosure period (annual report and Q1 report), so be fairly cautious with small-cap momentum names.

II. Breakdown of mainstream themes

1. Upper limit success: new energy upstream (lithium mining, lithium battery materials)

April production schedule data is above expectations (month-on-month +4%, year-on-year +56%). Combined with the Middle East situation pushing up oil prices, it benefits demand for electric vehicles and energy storage. This is a double boost of fundamentals plus sentiment.

Ganfeng Lithium

The absolute core where institutions and proprietary traders both converge. The trading blotter shows 3 institutions bought a total of 303 million, and 2 top-tier proprietary traders (Wuhan Ziyang East Road, Ningbo Guangfu Street) together bought 423 million. This buying pressure is extremely strong, indicating extremely strong market consensus. With only 1.85 trillion in volume capacity, large funds need a “capacity stock” like this to enter and exit. Yesterday’s volume-expanded limit-up and breakout above the prior consolidation platform. On the daily timeframe, it just started; MACD is crossing up, with the potential to run a main surge wave. April lithium-battery production schedules are above expectations plus the Middle East situation pushing up oil prices and benefiting新能源 substitution—directly benefits. A lithium mining leader: the sector’s “keystone” and “captain.” When it rises, the sector stays stable; when it falls, the sector becomes difficult. The trading blotter perfectly demonstrates an institution + proprietary trader resonance. In the next stage, it’s highly likely to follow a trend. For a trend “capacity stock,” buy on dips as the main approach; don’t chase. Next week, if there’s a pullback toward the 5-day line or near the 10-day line, it would be a good opportunity to get on board. It may not deliver consecutive limit-ups every day, but it will likely form an uptrend with consolidation.

Rongjie Co., Ltd.

One of the market’s general leaders, with four consecutive limit-ups. Although it didn’t appear on the trading blotter, as a representative of consecutive-limit-up height, its turnover is sufficient and its popularity is extremely high. A classic “consecutive-limit-up acceleration” formation. Monday is the key divergence day for the 5th limit-up. If it can hold with turnover and a sealed board, it becomes a “妖股” (a beast-like outperformer); if it breaks with a huge-volume failure, it signals a top in the short term. Like Ganfeng, it’s driven by the upstream strength in lithium batteries. It’s the sentiment benchmark of lithium mining; it decides how short-term funds view the lithium battery sector. The flaw is that this leg is mainly a consecutive-limit-up行情 led by proprietary traders. Proprietary traders move quickly, like spring weather—faces change constantly; they are unstable “inconsistent” players. Win/loss is shared from the same source. Fortunately, it’s currently in the mid-phase of a sector surge, so at least Monday has expectations. High risk, high reward. For short-term traders, Monday is the battleground: either it becomes the market’s overall leader, or it’s a phase top. It’s not recommended to gamble; you can treat it as a sentiment barometer.

Dongfang New Energy
A strong limit-up. The trading blotter shows a combined force from proprietary traders + quants. Two major proprietary trading houses—Guotai Jun’an, Wuhan Ziyang East Road, and Haitong (?), Shanghai Zhongshan East Road—bought 287 million in total; the quant strategy (Open Source Xi’an Taihu Road) bought 104 million. This is a stock where proprietary traders ignite the move and quants assist. A 20cm limit-up, with a very beautiful chart formation: it broke above the prior platform, showing an acceleration trend. It belongs to the lithium battery industry chain (possibly energy storage or materials direction). It’s a “catch-up by digging” target that capital discovered. The implication of “catch-up” is following the trend. It’s a high-beta flexible stock within the lithium battery sector. Funds are digging for a low-position catch-up. Proprietary traders lead, quants add. There’s no sign of institutional participation so far—suggesting this is mainly short-term arbitrage led by proprietary traders and quants. If it’s arbitrage, then Monday is the high-aspirations selling point. It falls into the category of high-elasticity short-term trades.

2. Lower limit success (中签): oil-and-gas substitution logic (coal-to-chemicals, phosphate-chemicals)

Overseas giants like BASF and Wacker raise prices. There are expectations of supply disruptions in the Middle East. This is cost pass-through plus supply tightening.

Jinmei Technology

A leader in coal-to-chemicals. Its price action is stronger than the sector—it’s the sentiment benchmark for chemicals.

Liuguo Chemical
First board limit-up with moderately expanded volume. Although it’s not a trading blotter hotspot, it has high identifiability within the phosphate-chemicals sector. There are signs of a bottom-volume-driven restart and a breakout from a downward trend. Oil and gas price increases plus dual drivers from lithium battery demand. Phosphorus is both fertilizers and a key raw material for lithium battery cathode material lithium iron phosphate (LiFePO₄). It sits at the intersection of lithium batteries and chemicals. The phosphate-chemicals sector is seeing linked upward movement. At present, it’s mainly led by short-term proprietary traders and quants; institutions are not deeply involved. It’s a trend catch-up potential stock. If it can hold above the annual line, you can buy on dips along the 5-day line. Benefiting from the dual logic, it has some safety margin.

Lubei Chemical

Phosphate-chemicals: indirectly benefits from lithium battery demand. It’s relatively lower in position and has potential to catch up. Here’s the commonality: indirectly benefiting from lithium battery demand. This sentence, without anyone realizing, gives “welfare” for Monday. Don’t look at the selloff in the prior wave—it was on shrinking volume. If things go wrong, it could turn into a “golden pit.”

3. Lower limit success (中签): valuation repair (innovative drugs)

Multiple leading companies turned losses into profits in their annual reports, combined with the sector being oversold. This is earnings-driven plus valuation repair.

Meinuohua
6 days with 5 boards; today it advances to 4 boards, which is the consecutive-limit-up height in the innovative-drugs sector. Volume is abundant and turnover is sufficient. It shows a strong N-shaped reversal with a back-covering candle plus consecutive-limit-up pattern, breaking through all moving-average resistance. It has dual attributes: weight-loss drugs + innovative drugs. The company itself has earnings, and the industry as a whole is also warming up. A sentiment benchmark for consecutive-limit-up in the innovative-drugs sector. Only when it creates space will the back rows follow, like Jiuzhou Medical and so on. Currently, it’s mainly being operated by proprietary traders; consecutive-limit-up stocks are their home turf. A sector trend barometer. Monday faces the pressure of the 5th board. Like Rongjie Co., Ltd., it’s a “test stone” for short-term sentiment. Don’t chase higher again; treat it as a sentiment indicator. If the innovative-drugs sector wants to run a trend, it needs to do what weight stocks like BeiJi Capital (?), and Hengrui Medicine do—break out with continuity.

Shutai Shen, Rejing Bio

20cm flexible stocks. The top choice for arbitrage when the sector is strong. Suitable for intraday following.

Hengrui Medicine, BeiJi Capital

Institutional trend “middle army.” The choice for steady-minded friends. Suitable for low-entry holding, gambling on the sector’s valuation repair.

4. Lower limit success (下签): OCS switches (a new direction for compute power)

The market is “closing ranks” and clustering in small circles; OCS switches (Tengjing Technology, Yunnan Germanium Industry) are stimulated by NVIDIA’s new architecture news. But the sector’s capacity is small, so it belongs to a “closed circle” rally. NVIDIA’s new architecture uses OCS switches, which is an added-volume direction for compute hardware.

Yunnan Germanium Industry

6 days, 3 boards. The concept is indium phosphate. It has a new historical high. The impact of the 2024 announcements is still in effect to this day, showing it has real substance and still enjoys the benefits. It is the core of the sector, but the position is relatively high; it suits friends with high risk appetite for a gamble.

Tengjing Technology

OCS core. Up more than 10%, with big elasticity.

III. Next week market expectations carry over

Next Monday hinges on volume capacity. If the first half hour can expand volume (forecast: the whole day returns to above 2 trillion), then the rebound continues, and the Shanghai index could attempt to hit 3,950 points. If it continues to shrink volume, then a spike-and-fade is highly likely, and the 3,800-point support will still need to be tested. Remember: a spike on shrinking volume is a selling point; a pullback on expanding volume is a buying point.

Next week (March 31–April 3) overall: the market is likely to be in a period of consolidation and differentiation for about a week, with a tendency for the weight of the focus to shift upward. In the first half of the week (Monday and Tuesday), profit-taking will be digested, and the index may pull back to the 5-day line to confirm support. In the second half (Wednesday and Thursday), as more guidance on quarterly earnings forecasts comes out, the earnings line will strengthen, and the index is likely to oscillate upward. The core is to focus on individual stocks (big emphasis) rather than the broad index (light emphasis): concentrate on core trend stocks that have earnings and where institutions replenish positions.

Ganfeng Lithium is the key holding for next week. If it’s strong, the trend-stock行情 continues; if it’s weak, the market returns to rotation. On Monday, if there’s divergence and a pullback early, it’s a chance to buy on dips and get on board. Don’t chase higher—wait for buy points near intraday moving averages.

Rongjie Co., Ltd. and Meinuohua are the sentiment barometers. If you want to participate in the consecutive-limit-up gamble, only look at these two highest boards, and you must wait for a turnover-board setup. If volume expands and accelerates boards don’t go (i.e., don’t break out), they’re easily smashed.

For 20CM, the main role is still arbitrage. The current volume capacity doesn’t support becoming overly infatuated with height. Stocks like Dongfang New Energy and Shutai Shen only fit “intraday following” when the sector is strong. Don’t pre-position yourselves, because rotation is too fast.

If you missed Friday’s rebound, it won’t feel good to chase on Monday again. You can wait for the index to pull back to the 5-day line (around 3,880–3,900 points) and then buy on dips in core trend stocks like Ganfeng Lithium. In a shrinking-volume market, chasing higher is a big taboo.

Overall, the market is shifting from the chaos of the post-exit-to-cooling-off period and starting to move toward a structural行情 driven by institutions replenishing positions plus proprietary traders clustering. The main directions are lithium batteries and innovative drugs.

IV. Around lithium mining, what stock will take over the baton as the market’s overall leader next week?

A, Meinuohua

B, Rongjie Co., Ltd.
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C, Xineng Taishan**
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D, Ganfeng Lithium**
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E, OYuan De**
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F, Datongnan**
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G, Shida Shenghua**
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H, Jingyuan Shares**
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I, Jinmei Technology**

J, Shuhua Sports
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K, Yunnan Germanium Industry**

L, Zhongnan Culture

Filing record: Lubei Chemical, Wanbangde, Shuanglu Pharmaceutical, Binhai Energy, Sulai Shares, Junya Health, Xianglu Tungsten Industry

Answer: A multiple-choice question.

The above is a static recap. Specific matters still need flexible real-time redeployment based on market dynamics. It’s only a macro framework. Please don’t copy it mechanically like “moving a boat and trying to draw a sword from it,” don’t copy-paste exactly—otherwise you may end up sailing in the wrong direction and causing your thinking to become fixed.

The above views and replies in follow-up posts are only for recap and research methodology purposes. The mentioned stocks do not constitute any investment advice. No guarantee responsibility is assumed. All sharing and交流 do not constitute actionable trading recommendations. No assurance of any returns is made. Profit and loss are your own. The stock market has risk; investing requires caution. Wishing everyone smooth investments, happy and fulfilling lives, and a harmonious, happy family. May the stock market soar, and may everything go well—wishing you great fortune in all things.

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