3.2 Core Strategy for the Market Tomorrow

The essence of short-term trading is “leveraging momentum to make quick money”—using themes and popularity, capital cooperation, and trend inertia. [Taogu Ba]

You must adhere to three iron rules:

Only trade strong stocks, avoid weak ones;

Go long online, observe offline, cut losses if breaking support, enter and exit quickly;

Focus on core stocks, stay away from miscellaneous ones.

1. What is the core, and what are the miscellaneous?

2. How to identify and operate the “core”?

Step 1: Identify the strongest sector of the day

After 30 minutes of trading, check the “Sector Gain List” on Tonghuashun or Eastmoney.
Exclude one-day speculative themes, choose sectors with policies, events, and logical continuous catalysts.
Pay attention to sectors with at least 3 stocks hitting the daily limit, and a complete ladder (first and second boards).

Step 2: Find the core within the strongest sector

Space Dragon: The stock with the highest number of consecutive limit-ups within the sector (e.g., 5 consecutive limit-ups).
Popularity Dragon: The stock with the highest trading volume and discussion within the sector (not necessarily the most limit-ups).
Trend Dragon: The solid mid-cap stocks in the sector that steadily rise along the 5-day/10-day moving averages.

Step 3: Execute the ultimate discipline of “focusing on the core”

Buy only the first place: If conditions permit, buy only the top stock in the sector. If you’re not confident in buying the leader, prefer not to trade in that sector.

Buy on divergence, sell on consensus:

Buy point: When the core leader first shows healthy divergence (e.g., sharp dip at open quickly recovered to the moving average, or rapid rebound after a breakout failure).
Sell point: When the core leader accelerates and consensus turns bullish (e.g., first large volume after a continuous limit-up, or huge volume at a high level indicating stagnation).
Cut loss immediately if the stock breaks support: For limit-up leaders, if they fail to hit the limit (break support), exit the next day without hope of recovery—no fantasies.

3. How to thoroughly “stay away from miscellaneous stocks”?

Proactive blocking: Only keep core stocks in your watchlist; do not look at stocks on the last pages of the gain list.
Resist temptation: When miscellaneous stocks suddenly surge, ask yourself: “Is it the leader? If not, why is it rising?” (Usually: to unload shares).
Position constraint: Even if trying a very small position to test miscellaneous stocks, strictly limit single-stock position to no more than 2% of total capital to prevent large losses.
Review and reflect: If losses come from miscellaneous stocks, record it in your trading journal, reinforcing the “miscellaneous = loss” muscle memory.

Core philosophy

In short-term markets, capital and attention are scarce resources, always gathering where the brightest spots are. “Core” stocks enjoy liquidity and sentiment premiums, while “miscellaneous” stocks bear liquidity discounts and selling pressure fears. Your task is not to find undervalued stocks but to dance with the market’s strongest funds in full view and leave before the tune changes.

Remember: In short-term trading, every act of sympathy or luck with miscellaneous stocks is a betrayal of your capital. The biggest profits come from the core, and the biggest losses often stem from refusing to cut losses on miscellaneous stocks.

Today’s holdings: Yunnan Energy Holdings, Zhangyuan Tungsten

Yesterday’s strategy:

1. Yunnan Energy Holdings hit the daily limit early, fitting the strategy, so no sell point.
2. 3. Shanghai Electric and Shenzhen South Electric did not meet the criteria at open, pass.
3. Jinzhengda did not hit a straight line at open, so Cixing and Jinzhengda do not meet the criteria, pass.
4. Yesterday, Yunnan was stronger than Zhangyuan, but today Zhangyuan Tungsten opened higher than Yunnan Geology, with Xianglu Tungsten’s first limit-up helping, so it fits the strategy, bought Zhangyuan Tungsten.

Tomorrow’s strategy:

1. Screening for core stocks hitting the limit-up today

2. Market leader

Yunnan Energy Holdings (001896): 7 consecutive limit-ups. Concept: Power + equity in computing power. Opened with a straight limit-up, briefly opened below the limit, then recovered, with over 1.6 billion in turnover. The highest space board in the market, setting the short-term sentiment direction.

2. The strongest main line (small metals/tungsten) core

Zhangyuan Tungsten (002378): 3 consecutive limit-ups (5 limit-ups in 7 days). Concept: Tungsten. Black tungsten concentrate prices hit record highs, the absolute leader of the sector.

Xianglu Tungsten (002842) / Zhongwu High-tech (000657): both hit the first limit-up. Concept: Tungsten. Sector strong follow-through, confirming main line strength.

3. Secondary strong main line (power) leader

Gannan Energy (000899): 3 consecutive limit-ups. Concept: Power. A follow-up rally after Yunnan Energy Holdings, a high-level limit-up.

Huan Yin Power (600744) / Shenma Power (603530): both 2 consecutive limit-ups. Concept: Power. Members of the sector’s ladder of limit-ups.

4. Other high-recognition limit-up stocks

Jinzhengda (002470): 4 consecutive limit-ups (6 days, 4 limit-ups). Concept: Phosphates. Rebounded at the end of the day, independent of the small metals main line.

Hongxing Shares (001209): 3 limit-ups. Concept: Home furnishings. An independent theme with high standards.

Farsun (000890): Breaks support. Yesterday’s 4-limit-up stock, today no limit-up, losing limit-up status.

Market overview: Today’s market shows a clear divide: “Cycle strong, tech weak.” Small metals (tungsten) become the strongest main line under the price increase logic, sparking a surge of limit-ups; power sector continues to be strong under energy demand logic. The previously strong AI hardware (CPO/PCB) sector generally retraced due to external sentiment. Yunnan Energy Holdings, as the market’s space anchor, with its 7-limit-up streak, opened a short-term high.

2. Core buy/sell strategy for next Monday (March 2)

Core idea: Remove the weak, focus on the strongest main line. Observe the sustainability of small metals/tungsten sector and the market leader’s sentiment feedback.

(1) Overall strategy and observation points

Sentiment anchor: Watch Yunnan Energy Holdings’ opening premium and support. As a 7-limit-up stock, if it hits the limit (opening down or rapid decline), market sentiment may retreat, requiring a full retreat.

Main line confirmation: Focus on the opening strength of small metals/tungsten sector. Indicators: whether Zhangyuan Tungsten and Xianglu Tungsten open high and quickly strengthen, and whether there are new first limit-up stocks.

Risk signals: If the number of stocks hitting the limit-up sharply increases (>15), or if high-level limit-up stocks collectively hit the limit, then go all cash.

(2) Conditions for buying/selling core stocks

1. Yunnan Energy Holdings (001896) – Market leader

Monday buy condition: Do not open new positions proactively. Just observe sentiment.
In extreme cases: If early panic causes a deep drop (-7% or more) with quick recovery within 10 minutes, consider small position testing.

Monday sell/hold condition: If unable to stay in the green or hit the limit within half an hour of opening, sell in batches. If hit the limit-down, cut losses immediately.

2. Zhangyuan Tungsten (002378) – Small metals sector leader

Monday buy condition: Sector and stock resonate strongly. (1) Sector confirmation: Small metals/tungsten sector opens strong, with more than 3 stocks hitting the limit-up in the first 30 minutes (excluding Zhangyuan Tungsten itself). (2) Stock strength: Open 3-6%, pull back without breaking the opening price, and attempt to hit the limit within 15 minutes. Action: After meeting conditions, consider low buying near the intraday moving average or hitting the limit.

Monday sell/hold condition: Hold if the stock hits the limit-up and stays there. If it breaks the limit and cannot recover, or the sector declines, exit immediately.

3. Gannan Energy (000899) – Power sector limit-up leader

Monday buy condition: Sector and leader confirm strength. (1) Yunnan Energy Holdings opens without severe negative feedback (e.g., limit-down). (2) Power sector opens with a first limit-up. (3) The stock opens high (+3% or more) and quickly hits the limit. Light positions can be taken.

Monday sell/hold condition: If the stock breaks support or weakens, sell immediately.

4. Jinzhengda (002470) – Independent high-standard stock

Monday buy condition: As an independent stock, do not open new positions proactively. Just observe market sentiment. If it quickly turns strong and hits the limit-up, consider light buying, but lower priority than main line leaders.

Disclaimer: The stocks and opinions involved do not constitute investment advice. They are personal review notes; trading profits or losses are at your own risk. (Stock market risks, invest cautiously.)