Big finance supports the market, tech stocks take a hit!!

$SentinelOne(S.US)hanghai Composite Index sh000001$ The market in the early session today was like half seawater, half fire.

At the opening, big finance, coal, and power led the charge upwards, with central SOEs and liquor stocks also lending support. The Shanghai Index quickly turned from a lower open to positive, giving the illusion of strength.

But upon closer inspection, something was off: The SSE 50 and CSI 300 clearly lacked upward momentum, with significant internal divergence among heavyweight stocks. Although the Shanghai Index was in the green, it felt scattered, lacking cohesion. Technically, the 5-day moving average acted as resistance, while the 30-day moving average provided support, resulting in a narrow range of minor fluctuations.

On the other hand, the big tech sector was completely "wiped out," dragging down the Shenzhen Component and ChiNext indices. The indices and individual stocks were like fire and ice, with neither gains nor losses showing much sustainability.

The sharp decline in tech stocks today was mainly triggered by last night's tech stock crash in the U.S. AI applications, semiconductors, and computing power—previously the hottest sectors—collectively plunged today. Leading stocks like New H3C and Zhongji Innolight saw early-session losses nearing 10%, with the ChiNext Index dropping over 2% and the Shenzhen Component down about 1%. The scene was indeed a bit frightening.

Looking at fund flows, caution is even more warranted: After a net inflow of 10 billion yesterday, net outflows from major funds before 11 a.m. today had already reached nearly 50 billion, with trading volume up by 28 billion compared to yesterday. Based on past experience, funds are likely to continue exiting in the afternoon, posing a significant risk of index pullbacks. Moreover, the outflows mainly came from high-flying tech stocks. If this sector continues to decline in the afternoon, the loss effect could worsen.

However, not all the market news was bad—there was a positive signal: Only about 1,500 stocks rose at the opening, but this quickly increased to over 3,000, while the number of limit-down stocks shrank to just over a dozen.

This shows that despite severe index divergence, overall market sentiment hasn't collapsed. Funds are shifting from tech to traditional sectors—a classic case of "when one door closes, another opens."

What’s next? Here are some practical trading suggestions:

1. Traditional sectors: Buy on dips, don’t chase highs; photovoltaics offer mid-term opportunities

Cyclical stocks like coal, oil, and gas surged today, but sustainability is uncertain. Those already in can set profit-taking points; those not yet in should avoid chasing highs and wait for pullbacks near the 10-day moving average.

Photovoltaics are worth watching. Musk’s team recently explored new technologies like heterojunction and perovskite, providing mid-term logic for the sector. Look for companies with technical advantages during pullbacks.

2. Tech stocks: Don’t rush to bottom-fish; wait patiently for signals

AI and semiconductors suffered the worst losses today, with short-term sentiment still fragile. If declines continue in the afternoon, avoid catching falling knives. Add tech leaders to your watchlist and consider 分批低吸 (scaled buying) only when losses narrow, volume shrinks, or U.S. tech stocks stabilize.

3. Position management: Keep cash on hand; avoid reckless additions

With market styles shifting rapidly, chasing rallies and selling dips is a sure way to lose money. Those with existing positions should avoid impulsive additions—hold cash until the market direction clarifies. If stuck in fundamentally sound tech stocks, don’t panic-sell at lows; wait for rebounds.

4. Key sector tracking

1. Commercial aerospace: This sector is supported by the 30-day moving average and broke above the 5-day line with volume yesterday, maintaining its uptrend. Short-term rebound potential remains. If the market trends upward later, it could sustain gains; but if styles keep flipping, consecutive rises will be tough. Avoid chasing and buy on dips during pullbacks.

2. AI & computing power: Overnight U.S. software stock declines, blamed on fears of large models displacing traditional firms, also hit AI applications today. Early-session competition with commercial aerospace exacerbated losses.

Long-term, however, as AI ecosystems mature, Agent commercialization will accelerate, directly benefiting computing infrastructure. Stay bullish on domestic computing and leasing—ignore short-term volatility.

In short: Watch more, act less; avoid chasing highs, keep ammunition ready, and strike hard only when market sentiment truly stabilizes!