Pre-market outlook 4.8, sentiment turning positive

① Index: Yesterday I said the holiday-related news flow was relatively supportive, and then it dropped for two more days. The probability of a repair on Tuesday is high, and today the repair was realized. Looking further ahead, with Iran and the U.S. here, it should be nearing a point where “a shoe drops.” What the market fears is uncertainty. Unless the conflict escalates to something clearly beyond expectations, it doesn’t seem like the impact will be that large. Then as reflected in the index, it may just form a double-bottom structure.[TaoGuba]
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The index moved in a fairly normal way, but sentiment today can clearly be felt as warming up. Mainly, it shows up in the fact that in each sector, the stocks that perform well are those few with high popularity. Another thing is that the rate of stocks advancing to consecutive limit-ups is improving. The index is choppy, and the market is shrinking volume. With these conditions, it may support a short-term speculative trading run. Watch as you go—while being a bit more proactive, you can also wait for further confirmation signals**
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② Sectors: There is a main line—follow the main line. The underlying logic of this saying is to buy something that has been rising continuously. In most cases, that is more likely to make money than buying something that has been falling continuously. Also, if you’ve made money in a sector, you’ll probably be more willing to keep rolling in the direction where you can make money—until one day you can’t make money anymore and a losing effect appears. Then you go look for the next direction.
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Last week, and even the week before last, it was relatively hard to trade. One big reason is that there were too many directions. Power, lithium, optical fiber, domestic computing power, and medicine—there are only so many things that can take the lead. From within these, it’s actually relatively difficult to pick medicine and optical fiber. Now the scope has narrowed a lot.**

1: Optical. Just yesterday, I said it—optical fiber has been moving relatively independently. Last Thursday and Friday, the index fell while it rose. But today, once the index picked up, its performance was actually worse. In that kind of situation, it still feels like you should focus on the sector and the trend stocks’ own condition.
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Trend core: Yangtze Optical Fiber and Cable, Hengtong Optic-Electric**
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Speculation core: Farsight Technologies, Tongding Internet, Zhongli Group, Xinneng Taishan.**
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Strength: Huiyuan Communications**

2: Medicine. This morning’s initial sell-off looked a bit like the power sector on March 30. The good news is that it was taken over and held up. When it should be weak but isn’t, that’s what “strong” means. The sector is currently in a differentiated state: the strong are strong, and the weak are weak. The strong are concentrated in high-position, high-popularity stocks; the weak are some mid-tier names without much recognizability—for example, Beida Pharma and Lianhuan Pharmaceuticals. There aren’t really any big highlights, and they just dropped straight down.
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Popularity core: Minovo, Jin Yaogye, Wanbangde.**
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3: Herding. Today’s herding, besides the cores of each sector, also includes a relatively strong direction—DuoDuo concept. Guosheng Technology, Farsight Technologies. A good entry point for this is just a little before the crowd gets packed. Today, the “reduction notice” came out, and it gives a feeling of packed crowds. When strength is highly unanimous, it usually hides a big risk of a sharp decline. It can surge up hard, and when it falls, it may fall hard too. Still, you need to watch the risks.**

Best wishes~

This article is only a personal recap and does not constitute investment advice. There are risks in entering the market; invest with caution