[Red Packet] Huddling Together for Warmth, Getting Through the Cold Spring

First, the conclusion:
The index is distorted, Shanghai is weak while Shenzhen is strong, and although trading volume is large, it’s a “false prosperity” with widespread declines across individual stocks. The weighting plays the role of setting the stage for bearishness, while thematic stocks are volatile and often hit the limit, indicating a market in extreme “80/20” divergence with high-low switching periods.

Friday’s market performance was not surprising; combined with the settlement of stock index futures, volatility was naturally amplified. The review on Thursday night also suggested this possibility. If the same expectations existed, the actual impact of a sharp drop on Friday should be manageable.

Since March, the market has been notably weak, especially with the escalation and prolongation of the US-Iran conflict, increasing risks and volatility in global capital markets. The A-shares are no exception. From statistical data, the difficulty since March has indeed been extremely high.

External conditions are freezing, and only by focusing on core assets, tightening defenses, and banding together can we find warmth.

On Monday, the core sentiment was deeply negative, with Yuan Energy Holding leading the way. From Tuesday to Friday, in a tough market environment, it consecutively closed with positive gains for four days, allowing core-focused investors to remain stable and calm amid harsh conditions.

Deep Dive: Market
$1
Friday, March 20

1. Key Data and Sentiment Diagnosis
1.1 Overall Market Performance
Today’s market was a “mixed bag.” The Shanghai Composite Index fell below 4,000 points and filled the lower gap, closing at 3,957.05, down 49.5 points; support levels are around 3,850-3,920.

The ChiNext Index defied the trend, rising 1.30%. Total trading volume across both markets was 2,286.8 billion yuan, an increase of 175.8 billion from yesterday. While funds are active, it’s not a sign of broad gains.

The number of advancing and declining stocks was highly uneven: only 631 stocks rose, while 4,589 declined, with a pervasive loss effect. There were 39 stocks hitting the daily limit up, and 23 hitting the limit down, with a high breakage rate of 45.1%. Stocks hitting the limit yesterday only gained an average of 0.82% today, indicating reduced willingness to chase gains. The “consecutive limit” stocks show a “dumbbell” structure: only 15% advance to two or more consecutive limits, while 100% of stocks with four or more limits advance, revealing that funds are fearful of high prices and low prices, only clustering around the most core “monster” stocks, leaving mid-cap stocks abandoned.

Market temperature: Cold wave, only banded groups have a flicker of warmth.

2. Deep Analysis of the Consective Limit Tier
Currently, the tier of stocks with consecutive limits shows a clear gap, forming a “dual dragon head” pattern.
5-limit stocks: Shenhua Development A remains at the top, no comment; China Power LiaoNeng also has five days with five limits, serving as a market sentiment indicator with a stable position. However, it saw huge volume on Friday and will face testing on Monday. The key is whether it can compete for the top spot with Shenhua Development A; breaking through this level is crucial for sentiment recovery.
3-limit stocks: ShaoNeng Shares and Dashengda, two stocks successfully upgraded, acting as core forces absorbing some of the funds spilling out from high levels.
2-limit stocks: Dongfang New Energy, Guo Nengyuan, and China Electric Power, three stocks upgraded, but China Electric Power has been on a 9-day, 6-limit independent trend, more trend-driven than consecutive limits.
Future focus: whether China Electric Power LiaoNeng can break out first, and whether the 3-limit stocks can upgrade smoothly to repair the mid-cap gap.

3. Hot Sector and Core Stock Comments
3.1 Power Sector
Eight stocks hit the limit up, strongly supporting the market. The logic is driven by the “computing power synergy” being included in the government work report for the first time, combined with energy crisis expectations.

Core stocks: China Electric LiaoNeng (5 days, 5 limits), the absolute leader in the sector; China Electric Power (9 days, 6 limits), an old monster stock rebounding actively, though with slightly weaker consecutive limit continuity.

3.2 Photovoltaic Sector
Seven stocks hit the limit up, stimulated by Elon Musk’s team planning to purchase Chinese photovoltaic modules, with a surge in the afternoon.

Core stocks: Guosheng Technology (14 days, 6 limits), an old leader with high recognition; Chint Power (8 days, 4 limits), a new core with a strong trend.

4. Overall Market Sentiment Analysis
Currently, the market is in a “retreat phase within a banding period.” The index is declining, and individual stocks are generally falling, but core leading stocks continue to rise. This reflects funds seeking certainty amid panic, banding together for safety.
Risk points: Low upgrade rate among mid-cap stocks, easy to encounter large declines if the rally fails; high breakage rate of limit-up stocks, poor risk-reward for chasing limits.
Opportunity points: Leading stocks with 5 or more limits, due to their scarcity, become safe havens for funds.
Sentiment indicator interpretation: Volume expands but stocks broadly decline, indicating liquidity siphoning caused by weight stocks unloading and thematic stocks internal fighting. Market sentiment is fragile, with very low tolerance for errors.

5. Future Market Direction and Focus
The overall trend remains a structural market; the index is unlikely to make significant moves in the short term. Opportunities lie in “true” banding main lines.
Focus areas:

1. The sustainability of power and photovoltaic sectors, especially whether leaders like China Electric LiaoNeng can continue to expand.
2. Be alert to the risk of high-priced stocks experiencing a correction; once banding loosens, it signals the start of a new retreat wave.

Join Shark Brother in overcoming obstacles,
Riding the waves in the big A-shares!

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【Important Notice】: The above is only a sharing of ideas and does not constitute investment advice. The market carries risks; invest cautiously!