4.8 Recap: Geopolitical tailwinds catalyze a rebound in the index, and a tech super-bounce frenzy sweeps across the entire market.

Middle East ceasefire, the regional clouds of geopolitics temporarily lifted, and A-shares are about to see a long-avoided breakout! The three major indices surged with violent bullish long candles; the ChiNext Index jumped nearly 6%, and the total trading value on both exchanges rose to 2.43 trillion yuan. Trading value surged by 820 billion yuan, and nearly 4,900 stocks finished in the green. The technology sector exploded across the board—computing power, optical communications, and PCB all hit the daily limit in bulk, with more than a hundred daily-limit boards. But short-term sentiment was clearly suppressed, and there are still concerns about an oversold-rotation undercurrent for themes.[Taoguba]

Chasing the trend to get into the play
Fueled by a stimulus from news that the Middle East geopolitical conflict has been paused, the indices opened with a gap higher, rising in a one-way advance. In the morning, the strength mainly came from the technology line led by computing power. After the afternoon, major financial forces such as securities and banks joined in, pushing the indices to surge further. In the end, all three major indices collectively skyrocketed and closed higher. The Shanghai Composite not only reclaimed 3,900 points, but also moved closer to 4,000 points. The ChiNext Index surged by nearly 6 points, returning again to above the big trading box. Throughout the day, both exchanges成交2.43T (24.3k) yuan, with a large expansion of 820.1 billion yuan. Today’s performance in the market was completely different from yesterday’s shrink-and-repair: a surge on expanded volume, not only eliminating worries about declines, but also showing a certain attacking posture. Next, we’ll see whether this state of rising on expanded volume can be maintained; if it continues, it would be expected to repair the downtrend structure of this round of decline.

In terms of themes, under broad-based gains today, everything blossomed, and the technology line was the most eye-catching. However, amid a screen full of daily-limit boards, there were clearly signs of rotation and oversold rebound.
Although the morning call showed some strength in communications, at the open computing power took the lead. Across the day, computing power hit the daily limit in 18 stocks, with daily-limit amount totaling 2.43T yuan. Oryade hit a 7th consecutive limit in 15 days to lead the way, Zhong An Ke hit 3 boards, and the rest were all first-time boards, mostly oversold rebounds.
Application-related hit the daily limit in 14 stocks, with daily-limit amount totaling 17.22B yuan. Yueda Media, which yesterday followed the “football” theme and also has an application concept, led with 2 boards. Decai Shares hit 2 boards in 5 days. The rest were also all first-time boards; individual stocks were likewise mostly oversold rebounds.
Optical communications today wasn’t actually weak; it was simply overshadowed by computing power and applications. Across the day, 11 stocks hit the daily limit, with daily-limit amount totaling 20.01B yuan. Huiyuan Communications sealed a one-word limit to advance to a 4th board. Tongding Internet and Keri Technology hit 2 boards. There were 8 first-time boards; Longfei, Changguang, Hengtong, and Fujing, among others, continued to maintain relatively strong trends.
Hardware also performed well. For PCBs, 11 stocks hit the daily limit, with amount of 21.27B yuan; for thermal management, 9 stocks hit the daily limit, amount of 24.34B yuan; for gas turbines, 8 stocks hit the daily limit, amount of 5.82B yuan. Although all were first-board stocks, the “pumping up” and support for technology were still fairly clear.
The chemicals that hit daily limits in bulk yesterday saw a total collapse today: 35 daily-limit stocks saw none advance to a next board, and more than 20 of them opened directly below the waterline with no premium. Under quant measures, the “harvesting” is equally ruthless.
Healthcare/biopharma moved into a pullback phase. Electricity stabilized for two consecutive days, and toward the close there were some signs of bargain-hunting and lineup accumulation; afterwards, there should be a rebound process.

Rise and fall of sentiment
Market sentiment was extremely hot. Since the market itself has repair needs, combined with positive developments from outside, nearly 4,900 stocks closed up throughout the day, and only fewer than 300 closed down. Stocks hitting the daily limit numbered even more than a hundred. After a surge on expanded volume, confidence that indices can repair will gradually return.
However, speculative sentiment lagged far behind market sentiment. Far-sightedly, Falsheng entered regulation overnight. After a limit-down open, it once rose intraday, but in the end it still closed near the limit-down. Similarly, Jinyao Pharma, which also entered regulation, blew up and closed below the waterline, ending with a big-loss outcome. Only two consecutive-limit stocks managed to advance—Huiyuan was a one-word limit, and only Zhong An Ke advanced with turnover. This big rise today still came largely from institutional effort; rather, short-term sentiment was diverted and weakened.

Thoughts for tomorrow
The index has removed the concern. Now, the key observation points need to focus on the theme layer. Although the technology line surged today, it still hadn’t gotten rid of the signs of an oversold rebound, just like the chemicals yesterday. The difference is that today’s themes and the index synchronized. So the crucial question for whether the next leg of the行情 (market cycle) can get started again is whether, at the theme level, it can change the pattern of rapid rotation amid weak consolidation.
Within the technology line, the application direction also surged, but overall the structure is still within a downward trend. To turn that feeling around is even harder; what we can hope for more is still hardware—especially optical communications—which overall should continue to lead gains.
In addition, institutional strength has contributed a lot to the index. But whether the institutional play can continue still needs to be tracked. The main reason is that many big “carriers” are still mainly rebounding and haven’t truly formed a main-upstructure. If later the institutional effort eases, then the market will still be led by quant trading and sentiment. On the short term, the pattern will be the same as before; it’s just that, due to regulatory reasons, the core carriers are expected to undergo a big reshuffle.
In short, the market has given confidence and hope. Whether there can be a good stretch of行情 afterwards still needs to be further confirmed. After all that long dark period has been endured, just pay more attention to relevant signals and don’t indulge in subjective speculation.

Trading takeaways
Today, Tongda Shares still gave an opportunity to sell into strength and take profit.
With the technology line rallying hard, it was really hard to focus, so I gave up on participating. At the start of the day’s auction, I placed orders for MinuoVua (美诺华); in the end, only a small portion成交.
During the session, I picked up a bit of Wanbangde when it was below the waterline, and I ended the day slightly in the green.

Post-trade holdings: MinuoVua, Wanbangde—two stocks.

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☑ Statement: What is described in this article is only my personal review notes. Any views and individual stocks mentioned are used solely as examples and do not constitute any investment advice. Please do not follow blindly. Trading is your own decision; investing involves risk; stock trading requires caution!
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