3.16 Turmoil

The overall market today still feels quite chaotic. [Taogu Ba]

Mainly reflected in two aspects:

1. Sector rotation is random. Taking the three most active sectors now—electric power, storage, and chemicals:

Chemicals surged sharply in the morning, with Jinzhengda hitting the limit-up twice and upgrading to a bull. Meanwhile, electric power was heavily profit-taking, with China Power Construction, which hit the limit-up on Friday, falling to the floor. By midday, electric power rebounded, whereas chemicals peaked early in the day.

Looking at the K-line chart, for storage, comparing its trend with the overall market, last Thursday before the market retreated, storage was already adjusting. The common logic says “the strong stay strong, the weak are eliminated first,” but instead, it became the strongest sector during the market correction.

2. There is severe differentiation among individual stocks within sectors.

In electric power, if the early morning decline was seen as an opportunity, choosing the right stocks—Jinkai, Nengjian, Hanlan, Shunna, Nengke, and Power Construction—was key.

Choosing between Shunna and Jinkai is equally challenging.

Picking the right sector + choosing the right stocks = profit.

8*8=64

7*7=49

If the success rate drops by 10%, the overall profit probability decreases significantly.

The 30-day moving average of the index has bottomed out and is rebounding, just hitting the lower boundary of the box. On a smaller time frame, it looks like a recovery; on a larger scale, it appears as oscillation.

In terms of direction, currently more active sectors include electric power, storage, chemicals, and PCB, which was catalyzed by Nvidia’s GTC conference. From a macro perspective, if the index undergoes a short-term recovery for two to three days, the market should be fairly balanced—good picks will yield more profit, poor choices less.

The sectors most benefited from the rebound are likely to come from these four, but the specific path will definitely be more complex.

Additionally, sectors with relatively good recent continuity, such as storage and chemicals, share a common point—they are related to performance. Based on past experience, March and April each year tend to be more difficult for thematic and short-term trading. During this phase, focusing more on trends and performance might be more comfortable.

Best wishes~

This article is only a personal review and does not constitute investment advice. Investing involves risks; please proceed cautiously.