3.5 Review, round麻

The two markets traded a total of 2.39 trillion yuan, with a slight increase of over 200 billion yuan in volume. Last night’s sharp gains in Europe and America, along with today’s big rally in Korea, led to a rebound with over 3,800 red stocks on the A-shares side. However, there was no clear main theme, and rotation was rapid. It is expected that this kind of market behavior will continue for the next one or two days. The rise and fall of the indices can be ignored for now. The market is currently divided into two camps: one on the conflict line and the other on the meeting line. [Taogu Ba]

On the conflict line, oil remained a major point of divergence at the opening. CNOOC’s bid briefly dropped to over -6, but eventually recovered and stabilized the sector. Later, crude oil futures surged significantly, and the A-shares gradually followed the recovery. By the afternoon, the intercontinental stocks hit the daily limit, reaching a peak in the sector. A piece of news from Iran—an official stating there was no blockade of the Strait of Hormuz—caused futures to hit the limit-up and then crash. The A-shares followed with a sharp decline. Regarding this sector, I want to clarify a point: in the short term, there is unlikely to be A-shares involved unless there is a ceasefire or peace talks. As long as there is no peace agreement, funds will continue to manipulate the sector, buying on divergence and selling on consensus expectations.

Sharing my personal view on the current situation: Iran just experienced a brutal attack by the US, with top officials wiped out. Today, they appointed the son of the former leader as the new LD person. This is a matter of national hatred and revenge for the father’s death. It’s unlikely that they will quickly negotiate peace at this point. Even if negotiations happen, they will need to inflict real pain on the other side to gain good bargaining chips. Therefore, this situation will likely persist in the short term. Coupled with tomorrow being Friday, funds will definitely engage in divergence and weekend news speculation. The market’s volatility will be relatively large and heavily influenced by futures markets.

Military industry, especially drones, is currently Iran’s core strategic tool, with a very high risk-reward ratio. It’s a classic “Tian Ji’s horse racing” approach: using cheap goods to exchange for the opponent’s luxury items, exhausting their resources, then delivering a fatal blow. Both sides are consuming large amounts of ammunition, which is very favorable for the military sector. This is also the time when performance will be realized. We will transfer weapons through Pakistan to Iran, and this sector will continue to be a focus.

The power grid sector in North America has serious shortcomings. The US’s 75 billion dollar investment plan for the power grid is one of the few relatively sustainable directions in recent days. However, after two days of sharp rises, participation will have to wait until divergence re-enters. Today’s power grid and oil sectors showed a clear tug-of-war.

MicroLED: Last night, institutions heavily promoted Zhaoti and Huacan Optoelectronics. Zhaoti saw increased bids, and Huacan was snapped up to the board. Quantitative analysis fully supported this sector. Tomorrow, aside from core front-line stocks, other stocks should be viewed as arbitrage opportunities.

On the meeting line, whenever news breaks during the trading day, any sector can be pulled up. Today, many sectors were affected, such as non-carbon energy, nuclear power, hydrogen energy, and new economy sectors like low-altitude, brain-machine interfaces, computing power, and commercial aerospace. Also, the sharing economy and others. When there is no clear main theme, funds tend to follow news randomly. The specific main theme will likely only be clear after the conference ends and the report content highlights certain sectors.

Big tech: The rebound in the index today was discussed last night. Several core large-cap stocks showed good upward premiums during the day. However, in a market with no volume and rapid rotation, it’s difficult for these stocks to sustain gains all day. Therefore, taking profits after a rise is the best strategy.

The above opinions are personal notes for reference only and do not contain any investment advice.

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** $Shandong Molong (sz002490)$ $Intercontinental Oil & Gas (sh600759)$ $Tongyuan Petroleum (sz300164)$**