2.5 Critical Moments!

$Giant Power Rigging (sz002342)$ Brief note: After the downturns in aerospace, AI, and precious metals, the internal short-selling momentum has basically been released. Why don’t people feel the profit-making effect? Because many people’s holdings are still in these three sectors, and having experienced multiple downturns, they have been somewhat hurt, so they don’t feel it. But the index clearly shows all this; it rises easily with a gentle pull. For such moments, I call them critical moments, because from Wednesday to Friday this week, any first-board stock could cross the year-end threshold. After all, next week only has five trading days. In this pessimistic environment, I suggest that the year-end rally may already be brewing. Many people don’t believe it, but often the market brews in environments of divergence and successive downturns. Next, I will analyze the index levels and sentiment cycles:

1. Index Cycle Thinking:

The index aligns with expectations, meaning it needs short-term repair and medium-term adjustment. The repair is because precious metals and resource stocks need to recover after four days of decline; a correction is not excessive. Many core stocks in these two sectors are components of the CSI 300, so their recovery will inevitably lift the index. Additionally, the repair is triggered by the exhaustion of short-selling momentum; for example, on Wednesday, a slight rally in financials pushed the index up. The medium-term view is for adjustment because large funds are still selling, such as Cambrian, and pre-holiday trading volume is expected to be thin, so there’s still a possibility of decline after a rally. These are my thoughts on the index cycle;

2. Sentiment Cycle Projection:

First, Dragon Analysis: Since the rebound on January 22, the strongest sector has been space photovoltaics. The reason is that Elon Musk’s team came to China to inspect photovoltaic projects, which was definitely with a mission and orders. But this has already fermented into a second wave, which has lasted three days, so we can only watch and wait, with limited opportunities. Conversely, in the first three trading days of February, due to continued declines in precious metals and resource stocks, market sentiment was not good. Many sectors were consolidating and speculating in groups. Before the Spring Festival, there are seven trading days left. Will there be a repair in precious metals and resource stocks, potentially leading to a new year-end rally? This is worth pondering, as these sectors do have repair needs. As for new sectors, I haven’t seen any yet;

Second: Opportunity Analysis: Looking at the new year, if there are new directions, the most关注ed sectors should be aerospace, AI applications, and precious metals/resource stocks. Among these, aerospace and precious metals are the most关注ed because AI applications have been hot before, showing high performance. But aerospace has gained significant attention due to the upcoming SpaceX listing, and precious metals like gold and silver have hit new highs, also attracting high关注. So, when choosing directions later, priority should be given to these two. Regarding aerospace, I previously mentioned three directions: satellite industry chain, SpaceX suppliers, and recycling technology. Recently, all three have shown results, with recycling technology being the strongest, as it could potentially be revolutionary. However, there is also a possibility of a correction in individual stocks. SpaceX suppliers, from the initial few to recent photovoltaic stocks, have experienced nearly two weeks of hype, and are likely to continue consolidating and eventually form genuine trend stocks. For precious metals and resource stocks, they collectively hit limit-down on Wednesday, and on Thursday and Friday, they began to repair in selected directions. Similar to aerospace before, resource and precious metal stocks may also develop branches with actual performance or expected performance, which depends on market selection. Recently, close attention should be paid. As for new themes, if any emerge, they should be followed immediately. Overall, in the last few trading days before the Spring Festival, trading volume gradually declines. Opportunities require aesthetic judgment. If unsure, it’s better to rest or participate lightly.

Special Reminder: The above information is for reference only and does not constitute investment advice. There are no stock recommendations! Investment involves risks; please trade cautiously!