3.16 Review: Rebound to the 60-day moving average, testing the left-side entry point, with the oscillation pattern difficult to break; follow the trend and avoid impulsiveness

The index dipped below the 60-day moving average and then recovered. Is this the dawn on the left side, or the darkness of a continued decline? The old cycle (power grid, chemical industry) is undergoing a bloody clearance, while the embryo of the new cycle is still gestating in chaos, waiting for the wind to come.[Taogu Ba]

Following the trend
The index mostly followed pre-market expectations: after an inertial dip below the 60-day line in the early session, it recovered, maintaining a volatile pattern. The Shanghai Composite slightly declined, while the Shenzhen and ChiNext indices closed higher, with ChiNext performing better. The total daily volume was 2,325.3 billion yuan, slightly reduced by 75 billion yuan, but not significantly, remaining stable. From a rhythm perspective, after today’s pullback, this is a left-side trading point, and there is an expectation of further rebound in the index.

Last Friday’s themes were relatively weak, and today they are even less promising. Amid disagreements across energy sectors, funds attempted to flow back into hardware, but the strength remained weak.
There were 10 hardware stocks hitting the daily limit, with a total of 11.116 billion yuan in limit-up gains. Falshe, in optical communications, led with three limit-ups, while others only hit the first limit. In the afternoon, storage chips showed some movement, but only four stocks hit the limit, with a total of 1.8586 billion yuan in limit-up gains—all first limit-ups. Trend’s Demingli hit the limit but then broke, while Guoke Micro, Baiwei Storage, and others surged significantly.
Over the weekend, news about marine economy did not ferment today, with only five stocks hitting the limit-up, totaling just 1.817 billion yuan, mainly a one-day rally.
The power grid sector mostly retreated. Last Friday, China Energy Construction, which resisted earlier, closed sharply lower. GCL System Integration also mostly declined, with only Shun Na Shares, which hit the limit down last Friday, showing a weak rebound and becoming a key survivor.
Last Friday, I mentioned that in the context of optical communication falling first and the power grid retreating afterward, the theme sectors would face greater chaos. Today mainly reflects a cyclical retreat. However, as the index stabilizes and the retreat converges, this chaotic situation will end soon.

Market sentiment fluctuations
Market sentiment is beginning to converge. From continuous broad declines, today shifted to more gains than losses, showing signs of stabilization. However, at the theme level, chaos persists, and market stability remains poor.
Speculative sentiment continues to be suppressed by regulation. Over the weekend, regulatory extensions caused Yunnan Energy Investment to open high and then decline, closing at the limit down. Top-structured stocks like Topstrong, which had been avoiding regulation, plunged during trading. Last Friday, high-flyers were sold off, initiating a retreat. Today’s retreat continues; high-flyers are still being sold, with some mid-culture stocks opening high and then falling sharply, Boren Group hitting the limit but then breaking, and chemical stocks like Luxi Chemical and Jinjingda surging and then falling back in large volumes.
Additionally, after last Friday’s retreat of the power grid sector, the chemical sector also followed today, with theme stocks showing decreasing persistence.

Tomorrow’s thoughts
Previously, the power grid and chemical sectors mainly operated on small cycles. During these periods, some minor sub-sector rotations occurred, but the overall background was a weak market in a volatile stage, not supporting major themes.
Currently, if the market stabilizes, a rebound is expected. As a third pullback structure, if a rebound occurs, it might be better than the one at the beginning of the month.
This requires observing whether new directions emerge along with the main market trend or if old directions reappear. Regardless, any movement that can synchronize with the main trend should be taken seriously.
This process requires patience. If the retreat is the most intense phase of slaughter, then the chaos at the end of the retreat is the most likely to cause complacency. Often, during trial and error, significant scratches and damages occur. Therefore, preserving strength during this phase is paramount. It’s okay to entertain but avoid impulsiveness.
Let’s continue waiting for the cycle to rebirth.

Trading insights
After last Friday’s contraction, today continued to be a wild card.
Holdings in Yunnan Energy Investment and GCL System Integration were cleared at the open.
Then I paid a little attention to Jinniu Chemical; after a day of struggle, it still couldn’t break through.
The Shun Na stock broke the limit, and I played some games.
The only stock I pointed out during the session, Falshe, ultimately hit the limit-up.

Post-market holdings: Shun Na Shares, Jinniu Chemical.

Data summary

☑ Disclaimer: The above is only a personal review note. Any opinions or individual stocks mentioned are for illustration purposes only and do not constitute any investment advice. Please do not follow blindly; trading requires independence. Investment involves risks; trade cautiously!
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