Chaotic market buying dips is king; focus on core opportunities in optical communications and pharmaceuticals.

I just took 10th place in the Taogub a 96th session Witness Cup live contest, with a single-month return of 47.89%.

This achievement wouldn’t have been possible without all of you who have quietly supported me along the way, cheering me on and encouraging me. I sincerely thank everyone for your companionship and trust! The road of investing is long; in the future, we’ll continue working together to improve, dig deeper into the market, and catch the right timing—striving together toward even higher goals, meeting at the peak, and winning together in the outlook ahead!

1. Overall picture of today’s market

On April 3, China A-shares overall saw a volume contraction and a pullback with most individual stocks falling. The three major indexes moved in different directions, and market sentiment leaned toward caution. By the close, the Shanghai Composite Index was at 3,880.10, down 1.00%, losing the 3,900-point key level; the Shenzhen Component Index was at 13,352.90, down 0.99%; and the ChiNext Index was at 3,166.06, down 0.21%, showing relatively better resilience. Total turnover across both exchanges was about 1.66 trillion yuan, slightly lower than the previous trading day. More than 4,700 stocks fell in the whole market, while only about 700 stocks rose. The “money-making effect” was weak, and the market was in a typical phase of chaotic tug-of-war.

2. My personal trading today

The current market is in a chaotic consolidation period. Hot themes rotate quickly and lack follow-through, so chasing high is very likely to get you trapped. Therefore, I have consistently stuck to a prudent trading strategy of buying on dips only and not chasing. I tightly control position sizing and risk. During today’s session, I entered four targets in batches on dips: Zhongli Group, Asia-Pacific Pharmaceutical, Zhaoyan New Pharmaceutical, and Sutaishen.

Focusing on the pharmaceuticals sector and low-priced stocks with potential aligns with the core logic of dip-buying arbitrage in today’s market.

In the earlier article, I clearly pointed out that we should carry out a “weed out the weak and keep the strong” approach. In the middle of yesterday’s trading, I decisively cleared out three stocks whose price action had weakened. From today’s board, both of these stocks have continued to weaken and have been among the biggest decliners.

Friends who strictly followed the trading rhythm successfully avoided the risk of the subsequent downswing and protected the existing gains. This also confirms the importance of “cutting losses in time and weeding out the weak” in a chaotic market.

3. In-depth analysis of popular sectors

(1) Optical communications sector

Today, the optical communications sector became one of the few bright spots on the board. It showed a pattern of multiple first-day-limit-up starts, with tiers gradually improving. Investor attention toward the sector increased significantly, and there were clear signs of a sector-wide launch. I raised my attention by one notch. Within the sector, stocks that reached consecutive limit-ups performed remarkably well. Huiyuan Communication and Xinnengtai Shan successfully advanced to the second board; among them, Xinnengtai Shan even delivered 7 boards in 9 days, becoming the sector’s core high-leading stock. There were many first-board candidates, including Tongyu Communications, Yitian Shares, Deko Li, Zhenzhi Technology, and more. They covered both 10cm and 20CM targets. The sector effect gradually became more apparent. Going forward, it has potential to continue to build up momentum and is worth tracking closely.

(2) Pharmaceuticals sector

The pharmaceuticals sector saw a differentiated performance today. The core high-leading stock, Jins Pharmaceutical, strongly pushed through six consecutive limit-ups and stood alone in carrying the flag for sector outperformance. However, the rest of the stocks in the sector had extremely poor “follow-through” effects. Most targets surged and then faded, with weak price action. Overall, the sector’s effect seriously lagged. I lowered my attention by one notch. Whether the sector can warm back up next depends entirely on the sustainability of Jins Pharmaceutical and whether it can pull the sector’s stocks back together collectively. We need to closely observe the leading stock’s driving effect.

(3) Other sectors

Due to the broader market’s weakness and rising risk-avoidance sentiment, other sectors showed no standout performance. Hot themes were scattered and lacked continuity, and there was no workable mainline opportunity. For now, I won’t focus on analysis.

4. Trading plan for the next trading day

(1) Pharmaceuticals sector

Focus on the走势 of the core leader Jins Pharmaceutical, and keep a close eye on whether it can bring an overall inflow of funds back into the pharmaceuticals sector. If the sector shows a clear “reflux” signal, we can focus the prior dip-buying entries in Asia-Pacific Pharmaceutical, Zhaoyan New Pharmaceutical, and Sutaishen. These targets have piled up volume noticeably in recent times, and their chip structure is stable. Once funds return, they will most likely see a “pulse-style” rally, with a good chance of generating solid returns. If Jins Pharmaceutical weakens and the sector stays sluggish, then we’ll keep an eye on it and won’t add positions blindly.

(2) Optical communications sector

1. Opportunity for “two-in-three”: Focus on how Xinnengtai Shan progresses from two to three. In terms of execution, I don’t recommend directly hitting the quick second-day limit-up. This helps you avoid getting trapped if the stock breaks down intraday. Wait patiently for confirmation from a successful re-close to the board. If it never opens the board during the day and never gives an entry opportunity, then don’t force the trade.

2. Opportunity for “one-in-two”: Screen for first-board stocks within the sector that have strong price action and ample volume. Key attention should be on Tongyu Communications, Yitian Shares, and Huiyuan Communication. These types of stocks have high sector recognizability and strong investor attention, so their probability of advancing from one to two is relatively higher. You can choose the best options and enter on dips.

(3) Other sectors

No specific targets to focus on for now. Continue to stay cautious, make no comment, and wait until the market shows a clear mainline signal before making decisions.

#龙头股# #龙头战法# #光模块#

The way to trade lies in planning your trades and trading your plan. Market conditions can change in an instant, and it’s hard to predict swings in both directions—but trading discipline is always the unbreakable bottom line.

When the sector lineup is complete and market sentiment is strong, boldly focus on the leaders and the front-row core names, capturing opportunities in the main uptrend

When the market enters a chaotic consolidation period, do not open positions blindly. Either stay in cash and wait quietly for the right moment, or open positions only to do dip-buying arbitrage

Only by aligning with the market’s rhythm and flexibly adjusting your trading approach can you stand firm for the long term in a volatile market and steadily achieve growth in returns!

Short-term games are not about insisting on being faster or slower for the moment; they’re not about seeking a one-day windfall. Let the water not compete for the first spot—what matters is that it flows on and on.