3.4 Review: From a Prolonged War to a Lightning Strike, Oil and Gas Carnival Comes to an Abrupt Halt, Chaos Market New Sails Await to Set Sail

The panic peak has passed, but the downward trend remains unchanged. Yesterday’s oil and gas rally was fleeting, and today the market experienced a full-scale collapse. Amid shrinking volume and oscillations, the market is officially bidding farewell to a single main trend and entering a difficult period of “chaotic rotation.” [Taogu Ba]

Following the Trend
The three major indices all surged then retreated, mainly oscillating below the waterline throughout the day, continuing yesterday’s decline. However, after yesterday’s panic peak, the decline has slowed, but the downward trend of the indices has been further confirmed. Currently, there are no clear signs of stabilization. The total volume for the day was 23,658 billion, a significant decrease of 7,638 billion compared to yesterday’s panic, and relatively stable. The focus remains on waiting for signs of stabilization and bottoming out.

Yesterday, the thematic sectors were quite fragmented. Today, with significant divergence in oil and gas, there is a sense of collapse. Quantitative strategies, driven by the U.S. launching a $75 billion grid plan, lifted the electric grid sector, but the momentum was weak.
There were 13 electric grid stocks hitting the daily limit, with a total increase of 15.017 billion, all on the first limit. Shenneng Electric Power had 3 limit-ups in 5 days, ranking relatively high. Guilin Electric Power had 2 limit-ups in 3 days. Jinkai New Energy and Hangdian Co., Ltd. both had 2 limit-ups in 4 days.
Some stocks in the computing power sector remain active, with 8 stocks hitting the limit-up, totaling 7.428 billion. Farsight Sheng, in optical communications, had 6 limit-ups in 8 days. Chuanrun Co., Ltd., which benefits from Huawei Ascend and North American orders, had 4 limit-ups in 12 days. Most other stocks only had their first limit-up.

The biggest focus today is on the geopolitical conflicts and divergence in oil, petrochemicals, and natural gas. Only 5 stocks hit the limit-up, with a total of 15.104 billion. Shuidi Gas had 4 limit-ups, while Intercontinental, Molyneux, Zhunyou, and Petrochemical Oil Service each had 3 limit-ups.
Natural gas divergence was the largest, with 31 stocks hitting the limit-up yesterday, but only Shuidi Gas advanced today; the remaining 30 stocks all broke their limits, with 27 closing lower, including some hitting the daily limit down or plunging sharply.
Yesterday, 26 oil and petrochemical stocks hit the limit-up; today, only the top four stocks with 2 limit-ups advanced, while stocks with 3 limit-ups, like Heshun Petroleum, briefly hit the limit down before closing sharply lower. The rest mostly declined.
The port shipping sector, which mainly follows the trend, was even more brutal. Yesterday’s 9 limit-up stocks all broke their limits, and 4 stocks closed at the limit down.

The divergence today, although partly related to cooling news, is mainly a backlash from the excessive quantitative adjustments. Overcorrections by quant strategies may cause some stocks to fluctuate repeatedly, but overall, stock-specific battles are more prominent, making it difficult to find sector-wide opportunities.

Overall, as geopolitical conflicts recede, the market enters a relatively chaotic phase characterized mainly by weak rotational movements. Exercise caution when following the trend.

Market Sentiment Fluctuations
Market sentiment remains at a low point. Although the performance of the Asia-Pacific and external markets is relatively better, the overall weakness persists, with nearly 3,500 stocks closing lower today. The oil and gas sector’s dominance yesterday has vanished, leaving only a trail of broken stocks.

Speculative sentiment has also contracted. This contraction is reflected not only in the reduction of stocks hitting the limit-down from 53 to 11 but also in the positive feedback from some recognizable stocks. For example, Yunnan Energy’s upward trend briefly hit the limit, and Huasheng Tiancheng, which plunged yesterday, actively recovered today. Tongding Interconnection closed at the lower limit but rebounded above the previous bottom, while GCL System Integration was relatively weaker but showed no negative feedback.

Yesterday, both thematic and individual stocks experienced high-low switching. Today, stocks are more focused, with weaker performance among laggards and follow-ups. Of yesterday’s 34 stocks with 2 limit-ups, only 4 advanced further, while 44 stocks with the first limit-up all failed to advance, which is quite rare.

Tomorrow’s Outlook
Although the market has not yet stabilized today, the thematic sector related to geopolitical conflicts, mainly oil and gas, has reached a turning point. Even if there are rebounds later, they are likely to be driven mainly by stock groupings, while other sectors remain in hibernation and healing.

From a cyclical perspective, the market is mainly chaotic, characterized by weak rotational movements. Under this assessment, the primary strategy moving forward should be to reduce exposure, avoid chasing thematic rotations, and refrain from reckless follow-ups.

Potential opportunities may come from some related stimuli during the upcoming meetings. If these can align with a significant market reversal, attention should be paid, but it’s not advisable to rush into a new speculative cycle.

In summary, the overall trend is weakening, cycles are chaotic, and under the premise of defensive positioning, focus on individual stocks rather than broad themes, patiently waiting through the lows.

Trading Tips
Today’s feeling is that the geopolitical conflict wave feels like a dream for many—just three days, and the dream is over. Opportunities that weren’t available before are now presenting themselves.
My holdings in Intercontinental Oil & Gas are based on arbitrage thinking; I’ve cleared the positions on the board and participated in this wave accordingly.
I bought low on Tongding Interconnection at the bottom, then sold high to reduce positions, which was relatively successful today.
Huasheng Tiancheng recovered, with an increase of over 7%, so I reduced some holdings. The remaining cost is negative, so I may consider rolling over later.
Opened two new positions: I bought some of Yunnan Energy Holdings at the open after selling it yesterday, despite some breakage, the support was decent. I also bought near a low on Hunan Gold, close to a negative nine low, with slight gains, though no clear recovery yet.

Post-market holdings: Tongding Interconnection, Yunnan Energy Holdings, Huasheng Tiancheng, Hunan Gold.

Data Summary

☑ Disclaimer: The above is only a personal review note. Any opinions or stocks mentioned are for illustration purposes only and do not constitute investment advice. Please avoid blindly following the market. Trading involves risks; invest cautiously!
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