This week is likely to fluctuate around 3800!!

$SentinelOne(S.US)hanghai Composite Index sh000001$ Last week's market felt quite familiar. Whether it was the macro environment or the style of gains and losses, it was almost like going back to mid-October.

On one hand, the intensity of steady growth was relatively restrained, coupled with the Fed's dovish expectations and the stimulus from overseas computing logic. Those long-neglected tech stocks have once again gained favor from capital. The market has returned to a rhythm where the tech sector is strong and cyclical industries are weak.

However, even though the style has shifted back to tech, can we conclude that tech stocks will rise across the board? Unfortunately, no. The current rebound in the tech sector lacks solid fundamental support. Or, to be more precise, the only strong logic supporting an upward breakthrough is the increased usage of Google TPUs, with full production and sales expected by 2026. The rise of other tech stocks is mostly riding on this hard logic for a rebound, without truly opening up new upside potential.

At this point, we need to pay attention to the CAPEX capital expenditure situation of U.S. giants next year. If CAPEX declines, it will still drag down the valuation of the AI sector.

As for the important meeting everyone is concerned about, I can summarize its core idea in one sentence: Hone internal strength to tackle external challenges.

There are several obvious changes here that we need to understand. First, the approach to stimulating domestic demand has changed. Previously, it was directly about stimulating consumption, but now the focus is on "formulating urban and rural income growth plans." The understanding of consumption has clearly deepened—after all, you need money in hand to spend. But increasing income isn’t something that happens overnight; it takes time, and results won’t be immediate.

Next, in terms of technological innovation, the emphasis is on concentrating resources. In the future, not just anyone can dabble in tech—resources will be concentrated in advantageous regions like Beijing-Tianjin-Hebei, the Yangtze River Delta, and the Greater Bay Area, while outdated enterprises will be phased out.

Additionally, risk prevention and real estate have been deprioritized, with livelihoods, employment, and green transition taking more important positions. This means we can’t expect another wave of flood-like stimulus policies. Or rather, the market shouldn’t always hope for unconventional policies. Given the size of our economy, expecting a super move every time is itself an unrealistic thought.

Once the policy tone is clear, the situation for A-share trading becomes easier to judge. Now is not the time for a direct index rally. To make more money, you need to pick the right direction, the right companies, and the right timing.

Although it rose last Friday, this week will likely still see fluctuations around 3,800 points. In such a market environment, our trading strategy should focus more on creating returns through structural rotation and phased catalysts. In this kind of high-volatility market, the key is not to get carried away, not to wait idly, but to seize every opportunity to reduce costs and day-trade.

Now, let’s look at the sectors and individual stocks:

1. Tech
On Friday, there was some unusual activity in domestic semiconductor equipment stocks, which is worth keeping an eye on. But in the short term, the rhythm is still hard to grasp.

For CPO large caps, Zhongji seems to be lagging. The drop in overseas tech stocks on Friday will likely affect tomorrow’s opening bids, and the subsequent trend remains unclear. So, for now, it’s best to observe.

2. Commercial Aerospace + Fujian Sector
Commercial aerospace led the recovery on Friday, with most of the expected rebound already played out. Tomorrow will likely see more volatility and divergence, but going forward, capital may prefer to cluster around the top one or two stocks. Right now, the obvious one is Aerospace Power.

As for Fujian, Pingtan is pricing in expectations of exiting regulation next Wednesday, and its recent performance has shown signs of separation from Hefu Strait. This can also be interpreted as capital clustering around Fujian’s core stocks. Early in the week, watch for divergence opportunities with clustering potential.

In summary, the market has rebounded with increased volume, but don’t get too excited—keep an eye out for clustering opportunities.

3. Heating Demand
1. The sudden drop in temperatures has directly driven up residential heating and commercial gas demand, with many northern regions starting heating early.
2. Natural gas consumption has increased by 15%-20% YoY, and thermal power companies’ capacity utilization has surged, reaching 300% in some areas.
3. Coal, as the main energy source for heating (over 70%), has seen daily power plant consumption rise by 15%-20%, with coal prices also up 15%.

The nationwide temperature drop over the weekend, with cold weather as a catalyst, presents a short-term trading opportunity worth watching. In a loose monetary environment, capital is also keen to explore themes with short-term catalysts.