Index trend reversal favors a downward move; exercise caution before the bearish failure! (Review as of 2026.03.03)

Data Review: [Taogu Ba]
Today’s Shanghai Composite Index -1.43%, ChiNext Index -2.57%, STAR Market 50 Index -5.21%, total market turnover 31,295 billion yuan, 643 stocks rose, 4,807 stocks fell, total market volume increased by 1,088 billion yuan compared to yesterday.
Market sentiment: All declining
Number of limit-up stocks: 76 (yesterday 87)
Number of 20-cent limit-ups: 8 (yesterday 10)
Number of consecutive limit-up stocks: 36 (yesterday 20)
Number of limit-down stocks: 53 (yesterday 8)
Today’s break rate: 24% (yesterday 24.7%)
First limit-up success rate: 47.7% (yesterday 27.7%)

Today’s Big Drop Stocks
Yunnan Energy Holdings -16%, involved in computing power/electricity
Before 9:45 AM opening, whether the previous big drop stocks can recover quickly is an auxiliary signal for sector recovery.

Today’s High Volume Bidding Stocks
Yunnan Germanium Industry

Overall Sector Chain Summary:
3-day limit-up: Hesong Petroleum (oil, involved in computing power), Shui Fa Gas (gas), Yasheng Group (planting), Huashengchang (acquisition of equity, electricity)

1. Sentiment Cycle and Key Node Analysis:
Median range decrease in limit-up stocks, a significant increase in consecutive limit-up stocks reaching high-level extreme, break rate steady, a sharp increase in limit-down stocks at high levels, the ratio of total limit-up transaction amount to market total: 0.41 (median range).
Compared to yesterday, notable changes are in the surge of consecutive limit-up stocks and the success rate of first limit-up upgrades, which have increased sharply and even reached extreme levels, indicating that profit-making effects are concentrated in new thematic sectors related to geopolitical tensions, leading to a polarized market. Currently, it is a chaotic cycle with major divergence points.

Sentiment Temperature: Weak (around 30)

Tomorrow’s Short-term Market Sentiment Anchored Stocks:
Yunnan Energy Holdings, Tongyuan Petroleum, Jiangwu Equipment
Before 9:45 AM, these stocks’ positive/negative feedback and extreme sentiment anchoring will signal market bullish or bearish sentiment temperature.

Recent Strong Sectors, Top Performing Sectors Today, and Notable Stocks:

2. Capital Flow Analysis:

Loss Effect -
Sector distribution across commercial aerospace, chips & semiconductors, computing power, etc., indicating overall market panic and profit-taking.
Structural distribution varies, represented by Jiangwu Equipment, Shenghe Resources, Xingye Silver Tin, etc.

Profit Effect -
Concentrated in sectors related to geopolitical tensions such as oil, gas, and shipping, representing risk-averse capital sentiment.
Mostly at mid-to-low levels, represented by China Merchants Steamship, COSCO Shipping Energy, China Merchants South Oil.

Capital Flow Summary:
Funds are further entering sectors related to geopolitical tensions for defensive risk aversion, reflecting a phased profit-taking signal in tech sectors. Since short-term funds are favoring defensive positions, only after the decline of shorting funds in tech sectors and realization of geopolitical sector profits will liquidity be released.

3. Sector Analysis:
Today’s sectors or concepts showing a healthy trend include: Optical Fiber / OCS / Tungsten Metals / Oil / Gas / Ports / Planting / Methanol.
These sectors or concepts represent recent profit effects and high recent capital involvement, serving as short-term stock selection directions.

Geopolitical Sectors (Oil, Gas, Ports) -
In the first stage of trend cycle.
Led by China Merchants South Oil and COSCO Shipping Energy, with smaller players following.

Path of Geopolitical Sector Today:

During bidding, intercontinental oil & gas with 4 billion buy orders, stocks like Zhongyuan Oilfield, Shandong Molong, China Merchants South Oil hit the limit-up, large-cap stocks like China Merchants Steamship, COSCO Shipping Energy, CNOOC opened high, consistent with yesterday’s strong sector signal.
Post-open, Zhongman Petroleum, Blue Flame Holdings, Beiken Energy quickly hit the limit-up, large-cap stocks like China Merchants Steamship, COSCO Energy, CNOOC experienced minor fluctuations but strengthened, with Tongyuan Oil showing divergence and breaking out, indicating continued strength in the oil sector.
Subsequently, related natural gas stocks like China National New Energy, Hongtong Gas, Baichuan Energy also surged, with gas stocks like GZ Gas and others hitting the limit-up around 10 AM, forming an intraday explosion pattern.

Today’s gas sector rally was driven by news that Qatar Energy, the world’s largest natural gas producer, announced shutdowns after an attack on its facilities, which can be viewed as a new thematic branch, similar to precious metals or methanol. The key point in geopolitical speculation is the oil sector; branch themes should be viewed as low-position arbitrage expectations, with potential for differentiation and淘汰.

Notable signals in today’s oil sector include:

1. After 10:20, the index pulled back from a decline, but the oil sector, which usually moves inversely, showed no profit-taking signals, indicating either market rejection of the index rally or that the index is a manipulated distortion, confirming market recognition of defensive risk sentiment.
2. Major stocks like CNOOC, COSCO Shipping Energy, China National Petroleum, Sinopec hit the limit-up, indicating high short-term capital involvement, and even if the sector declines, large funds are unlikely to quickly exit in extreme negative feedback.
3. Most first-limit-up stocks yesterday upgraded to second limit-up, with only a few riding on concepts, and oil & gas engineering and exploration sectors hit two consecutive limit-ups, with no follow-up laggards, suggesting a sector high point.

Despite the oil sector’s strong continuation today, it remains sensitive to news and sentiment, with uncertain outlooks. Given the ongoing geopolitical tensions and the likelihood that the sector cannot sustain long-term bullishness, caution is advised after sentiment peaks, with partial exits and hedging.

Tomorrow’s key signals to judge sector strength:

1. Whether intercontinental oil & gas continues to show large single limit-up orders.
2. Whether bidding phase has at least three stocks hitting the limit-up.
3. Whether the two-limit-up stocks break through recent suppression and upgrade to three limit-ups.
4. Whether one of China Merchants South Oil, CNOOC, China Merchants South Oil, or China Merchants Steamship upgrades to three limit-ups; multiple upgrades are a plus.
   Meeting these conditions indicates sector continued strength.

Metals (Small Metals, Rare Earths) -
In the first stage of trend cycle.
Led by Jiangwu Equipment and Zhangyuan Tungsten, with smaller players following.

Path of Metals Sector Today:
During open, stocks like Xianglu Tungsten and Huaxi Nonferrous oscillated and strengthened, but core stocks like Zhangyuan Tungsten and China Tungsten High-tech showed weak to strong shifts. Jiangwu Equipment, the core of the trend, opened weak and oscillated lower. The sector saw some capital attempts at recovery, but then related rare earth stocks like Shenghe Resources plunged, with a limit-down, and panic sentiment caused a sharp decline, with all rare earth stocks near negative feedback and breaking structures.

Today’s metal sector decline was extreme. Rare earths and nonferrous metals, which were previously driven by price increase logic and risk-averse attributes, saw a sharp correction after a strong day yesterday. This can be viewed as a misjudgment or a淘汰 process, with the first day of emotional risk aversion causing broad gains, followed by a divergence and淘汰 in secondary sectors.

In summary, the rare earth sector’s negative feedback broke the short-term recovery expectation, while tungsten metals, despite not breaking the structure, were possibly misjudged and may recover if no further declines occur tomorrow. If further declines happen, it signals a short-term end.

Artificial Intelligence (Computing Power, Chips) -
In the 13th stage of trend cycle.
Led by Haili Shares and Chunzhong Technology, with others following.
Multiple stages of leadership:

• Stage 1: Haili Shares, Chunzhong Tech
• Stage 2: Haili Shares, Dongxin Tech
• Stage 3: Chunzhong Tech, Huasheng Tiancheng, Yingweike
• Stage 4: Huasheng Tiancheng
• Stage 5: Cambrian, Haiguang Info
• Stage 6: Huasheng Tiancheng
• Stage 7: No core leader, sector rotation
• Stage 8: Industrial Fuxian, Shenghong Tech
• Stage 9: No core leader, alternating core rises
• Stage 10: Demingli, Shannong Chip, Jiangbolong, Zhongji Xuchuang, Shenghong Tech
• Stage 11: Blue Cursor, 360, Vision China
• Stage 12: Rotation and trial-and-error
• Stage 13: Tongfu Microelectronics, Haiguang Info
• Stage 14: Longfibre Optic, Hengtong Optoelectronics, Hang Electric

Huawei Ascend’s core: Huasheng Tiancheng, Huafeng Tech, Taijia Shares, Shenling Environment, Yihua Shares — funds are phased into adjustment, short-term outlook uncertain, medium-long term logic.
Transformer core: Yigaoer, Jinpan Tech, Wangbian Electric, Sifang Shares, Siyuan Electric, China Xidian, TBEA — phased adjustment, outlook uncertain, medium-long term logic.
Gas Turbine core: Liande Shares, Wanze Shares, Yingliu Shares, Boyingte Welding, Weichai Power, Dongfang Electric — phased adjustment, outlook uncertain, medium-long term logic.
Second-generation Electronics core: Guoji Fucai, Honghe Tech, China Giant Stone — phased adjustment, outlook uncertain, medium-long term.
Q-Board core: Filihua, Ping An Electric, Zhongcai Tech, Dongcai Tech — in adjustment, outlook uncertain, medium-long term.
Copper Foil core: Copper Crown Foil, Longyang Electronics, Fude Tech — after rebound, entering adjustment, outlook uncertain.
PCB Drilling core: Dingtai High-tech, Zhongwu High-tech, Dazhu CNC — outlook uncertain.
PCB Factory core: Hudian Shares, Shennan Circuit, Shenghong Tech, Shengyi Tech — phased adjustment, outlook uncertain.
Optical Fiber core: Longfibre, Hengtong, Tongdeng, Hang Electric — currently the best trend in computing branch, oscillating upward, anchored by trendline.
OCS core: Tengjing Tech, Dekeli, Guangku Tech — deep correction phase, outlook uncertain.
CPO/Optical Communication core: Tianfu Communication, Juguang Tech, Zhishang Tech, Jepu Tech, Mingyang Circuit — some have broken structures, caution on phase profit-taking.
Memory Chips core: GigaDevice, Jiangbolong, Shannong Chip, Demingli, Baiwei Storage — deep correction, outlook uncertain.
Domestic Semiconductor Front-end: North China Huachuang, Jiangfeng Electronics, Fuchuang Precision, Dinglong Shares, Chip Source Micro, Green Da, Jingce Electronics — related to wafer manufacturing, short-term outlook uncertain.
Domestic Semiconductor Back-end: Changchuan Tech, Changdian Tech, Tongfu Micro, Jingzhida, Jinhai Tong, Xidian Micro, He Lin Weina, Polymer Materials — related to packaging/testing, outlook uncertain.

Today’s tech sector path:
During bidding, optical fiber and optical communication showed movement signals, with core stocks like Tongdeng, Hang Electric opening high.
Post-open, optical fiber and communication stocks opened high but declined, with some trending weak, such as Huawei Ascend, Yihua Shares, Shenling Environment. Chips, semiconductors, and computing power sectors oscillated and weakened, with only a few stocks like Tongdeng, Taijia, Longfibre, and Juguang remaining active.
In the late session, Huawei Ascend, Tewi Info, Huasheng Tiancheng showed bottom-fishing signals.

Summary:
Tech sector and index are resonating downward with significant divergence, all segments showing breakdown structures. The entire tech line is in a phase of adjustment, with some signals of funds moving, especially in Huawei Ascend, which warrants observation for potential recovery. Optical fiber’s core trend shows resilience, maintaining the upward trend line, with no breakdown expected if no further declines occur tomorrow.

4. Index and Market Outlook:

As shown in the chart, today’s market opened slightly higher, then declined sharply with a large red candle. Yesterday’s review mentioned market uncertainty, suggesting waiting for clearer fund flows. The tech sector’s aggressive bidding and risk-averse sectors like oil showed anomalies.
Post-open, funds clearly favored the risk-averse oil sector, matching the mismatch signals discussed earlier, indicating a potential market turning point. The tech sector and index declined together, signaling a downward adjustment.

Since the market has chosen a direction and is in a retreat phase, with continued volume of 1,100 billion yuan, it indicates many funds are panic-selling. Until the shorting momentum exhausts, the recovery of the index is limited. The next support level is around 4,080 based on the left-side shadow of the daily candle; if broken, the market may enter a difficult phase of short-term adjustment.

Pre-market thoughts for tomorrow:
From sector perspective, after the geopolitical sectors’ sentiment peaks and divergence, with no significant index recovery expected, liquidity release is unlikely to shift heavily back into tech sectors, so caution is advised even if some recovery occurs.

From sentiment perspective, today’s shorting momentum was strong; continuation of decline tomorrow is possible, with a higher chance of rebound and fall-back. Until the shorting momentum exhausts, cautious participation is recommended, waiting for a stabilization of the index and sentiment bottom for entry.

Everyone, don’t just free-ride—please like the main post and comment as a minimum. If capable, support with some “Cheering Vouchers.” Turning 7 vouchers into a featured post gives the author motivation to keep writing! Say no to free-riding—thank you!