Likes ReceivedApril 30, 2024 Morning Trading Strategy: Distinguish Between Primary and Secondary Trends
The index broke through and stabilized above the annual line before the holiday, handing out holiday red envelopes to everyone.
Especially the ChiNext Index, which closed with a 3.5% gain. The trading volume of the two markets surged by another 550 billion yuan, breaking through the annual line and reaching a high of 3,119 points.
There are many reasons for the index breakthrough. First, in terms of policy, the release of the "Nine National Measures" was followed by a strong upward surge in the index. Second, there was real action from capital—last Friday, northbound funds net bought 22.4 billion yuan, and yesterday another 10.8 billion yuan was invested. This time, they refused to just shout slogans and instead put real money into the market, helping it return to trillion-yuan turnover!
I’ve said before that "prolonged sideways movement leads to a drop" doesn’t hold in a bull market. After eight weeks of consolidation, the longer the sideways movement, the higher the eventual rise. Yesterday’s breakthrough of 3,100 points was within expectations. The targets for May: 3,220 points and 3,400 points.
The yen has depreciated sharply, and international hot money is fleeing Japan to avoid risks. Among the Asian currencies depreciating this round, only the RMB remains stable. The undervalued A-share and Hong Kong markets are perfect destinations. With both domestic and foreign forces joining in, the market is strengthening. The Shanghai Composite Index has risen above 3,100 points, entering a "red May" ahead of schedule!
Yesterday, market sentiment surged again, resembling the pre-holiday rally, but there are differences.
From a sentiment perspective, it has been gradually recovering these days, so it’s possible it could form a rally similar to the pre-holiday one.
This rally is more about financials, real estate, and high-quality blue-chip stocks with strong earnings. Yesterday, it was the ChiNext and Shenzhen Component Index. What really drives the market are these high-quality blue chips—whether second-tier or first-tier, especially with stocks like Vanke hitting the limit-up. Real estate stocks are getting policy support to gradually resolve sector issues.
As long as the market stabilizes, other stocks and concepts will rise. But with sectors broadly gaining, we must distinguish between primary and secondary trends to avoid missing the main opportunities.
The breakthrough in trading volume and sustained profit effects mean the market is flourishing on multiple fronts. First, the earnings-driven stocks are still rising. Second, real estate and financials—financials led last Friday, real estate yesterday. So, real estate and financials are stabilizing the market.
Now, let’s look at themes and individual stocks:
1. AI
Earnings are gradually materializing domestically and abroad. NVIDIA continues to surge, while domestic players like InnoLight and Zhongji hit new highs. HiSilicon dropped to the limit-down due to last night’s announcement, but this is just emotional pressure washing out weak hands—major funds are still in control. Overall, AI stocks with solid earnings are stable.
Additionally, as overseas markets stabilize, oversold bottom-tier applications are rebounding. Domestically, the catalyst is Vidu, a pure in-house-developed video large model based on the U-ViT architecture by Tsinghua’s AI team—dubbed China’s Sora. Stocks like Huace and Huichang are rebounding on this news.
AI remains the biggest global industry trend. Stay bullish. In short, for AI-led tech (CPO/computing power/storage/PCB/application), pullbacks are buying opportunities. It will remain the top choice for capital in May.
2. Autonomous Driving
Elon Musk’s visit to China yesterday included talks with our Premier about autonomous driving—Tesla’s most critical future direction. In terms of production, it’s hit a bottleneck, so autonomous driving is the next step.
Tesla’s FSD differs slightly from domestic solutions. China is also developing its own autonomous driving programs, but I believe the U.S. and China, especially Tesla, can jointly advance the development of new energy vehicles and smart driving.
China hasn’t shut the door but emphasizes win-win cooperation. This is crucial—only through collaboration and technology transfer can we grow together.
Actually, I think the secondary issue is data. Data security is our biggest concern now—the U.S. cares, and so do we. So, negotiations won’t conclude quickly. But smart driving is undeniably a major trend, just like the low-altitude economy. Expect continued momentum, making it a key theme!!!!!!!!
The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.
