Su Yi watched as the Shanghai Composite Index quickly rose and turned positive from around the 2850 point level, and also saw the entire market's liquidity crisis being eased by the massive inflow of bottom-fishing and takeover buying funds.
He knew that the most brutal phase of this round of stock market crash was finally over.
He also knew that the Shanghai Composite Index, having plummeted to this level in one go, had fully released the market's panic sentiment.
Furthermore, he knew that once the market's liquidity crisis gradually eased, the market, around this level, would usher in a wave of sentiment-repairing rebound.
However, even though he knew this point was a temporary bottom for the market.
But Su Yi, amidst the continuously soaring blue-chip and white-horse stocks, and the performance of financial heavyweight stocks, did not rush to bottom-fish and follow suit.
Instead, he continued to patiently wait for changes in the market's dynamics, and searched for the concept themes and related core stocks that could best drive market sentiment and where main institutional funds converged most concentratedly during the rebound.
In his observation.
The banking, insurance, securities, petrochemical, infrastructure, and consumer sectors all rebounded across the board.
Among these, the core stocks in these various sectors.
Such as the four major banks, the two major oil companies, Huaguo Jianzhu, Huaxin Zhengquan, Qianzhou Maotai... and other stocks, all experienced sharp increases driven by continuous large buy orders of tens of thousands of lots, surging violently, continuously breaking new intraday highs.
Even Qianzhou Maotai and the four major bank stocks, in just five or six minutes after the afternoon opening, saw their intraday gains pushed up by over 5%.
However, the continuous surge of these heavyweight stocks, while driving the strong upward movement of the Shanghai Composite Index and the A50 Index, causing both indices to leap out of deep water and turn positive.
However, its impact on overall market sentiment, especially on concept growth stocks in the SME Board and ChiNext Board sectors, as well as numerous component stocks within the CSI 300 and China Securities 500 Index domains, was not significant.
This meant that while the Shanghai Composite Index turned positive and rose, the Shenzhen Component Index and ChiNext Index were still down by over 5%, and over a thousand stocks in both markets remained at their daily limit down.
It wasn't until "National Defense and Military Industry" – a sector that had suffered the most severe decline in this stock market crash, with even its sector index having entered a continuous daily limit-down pattern – showed unusual movements.
And especially when Huaguo Zhonggong, this core heavyweight large-cap stock and a main line of the "military industry" concept, violently surged from its intraday daily limit down.
The entire CSI 300 Index, China Securities 500 Index, as well as the Shenzhen Component Index, ChiNext Index, and SME Board Index, only then began to experience a sustained rebound.
The liquidity crisis in both markets also then began to show substantial alleviation.
"Huaguo Zhonggong..."
Su Yi hadn't expected it to be this stock that truly triggered the market's emotional reversal.
However, after Su Yi pondered over the logic of this stock for a moment, he could also understand.
After all, due to positive expectations such as "securitization of military assets," "deepening reform of military enterprises," "increased defense spending," and "strengthening the military and the nation," in this bull market, the "military industry" concept theme had always been a core concept theme where various short-term investor groups gathered for speculation, with countless short-term speculative funds continuously relaying momentum, and a very strong profit-making effect.
Moreover, because what was coming next was the highly anticipated "National Day Grand Military Parade," which countless Chinese people were looking forward to and paying attention to.
Although the "military industry" concept theme had been severely hit by the "liquidity crisis" in this stock market crash.
Even core heavyweight large-cap stocks like Huaguo Zhonggong, with a market value of over 200 billion yuan, also, in this stock market crash, experienced a halving in price due to continuous daily limit-downs.
However, analyzing from the direction of expectations.
The speculation expectation for the "military industry" concept theme, as the "National Day Grand Military Parade" timeline approached, not only did not weaken, but instead gradually strengthened.
These factors, combined with the short-term heavily oversold trend, naturally provided various capital groups the impetus to continue gathering and speculating on the "military industry" concept theme.
As for why Huaguo Zhonggong was able to lead a desperate rebound, driving other major concept themes in the entire market, as well as concept growth stocks in the SME Board and ChiNext Board sectors.
Su Yi believed it was also because the trend of the "military industry" concept theme previously followed other main concept themes and concept growth stocks in the SME Board and ChiNext Board sectors, rather than following the financial, infrastructure, and consumer sectors of the main board.
Understanding this...
Su Yi immediately began to establish positions and follow up without hesitation, continuously placing large buy orders of tens of thousands of lots, preparing to first establish an initial position of 100 million yuan in capital.
His current capital size was already very large.
Over 600 million yuan in funds.
Given that current market liquidity had not yet significantly recovered, and many stocks had limited intraday liquidity, there weren't many targets he could participate in.
And coincidentally, heavyweight large-cap stocks like Huaguo Zhonggong were suitable for large capital movements like his.
Not to mention his over 600 million yuan in funds; even if the capital size were slightly larger.
With Huaguo Zhonggong having a float of nearly 180 billion yuan, and an average daily trading volume of 10 billion yuan over the past six months (excluding continuous limit-downs during the stock market crash), his impact on its trading activity wouldn't be particularly significant.
Moreover, he could also manage short-term operations to exit within two or three trading days, or even on the following day, without being constrained by market liquidity and getting stuck in a situation where he could enter but not exit.
As his large orders continued to follow in.
At 1:15 PM, Huaguo Zhonggong's stock price, from its daily limit down, rebounded to a decline of 4.75%.
At this point, Su Yi had already established positions worth over 60 million yuan in chips, with a holding size of 60,000 lots.
At 1:22 PM, Huaguo Zhonggong's stock price turned positive, and Su Yi completed establishing an initial position of 100,000 lots.
At 1:26 PM, Huaguo Zhonggong's stock price surged to a gain of 1.56%, with its intraday trading volume reaching the 5 billion yuan mark.
Meanwhile, Huaguo Yinhang surged over 7% intraday, Qianzhou Maotai surged over 5% intraday, Huaguo Shiyou surged over 4% intraday, and Huaguo Jianzhu and Huaxin Zhengquan also surged over 5% intraday...
Then, driven by the two "national team" main funds, Zhengjin and Huijin, as well as market-stabilizing funds from various proprietary trading firms of brokerages, insurance companies, and banks, and the efforts of countless follow-on bottom-fishing orders, short-term speculative orders, and other various funds.
At 1:32 PM, the Shanghai Composite Index rallied to a gain of 3.43%, reclaiming the 3000-point level.
However, other non-state-controlled enterprises that lacked the support of the "national team" market-stabilizing main funds, and concept stocks in the SME Board and ChiNext Board sectors, after a brief follow-on rebound, were once again hammered down by massive concentrated selling and panic selling due to insufficient subsequent buying power.
This caused the liquidity crisis to reappear in both markets during the late trading session.
Ultimately, when the market closed at 3:00 PM.
The Shanghai Composite Index still closed down 1.23%, failing to truly reverse the downturn.
Meanwhile, the Shenzhen Component Index and ChiNext Index continued to plunge by about 7%, with over 1300 stocks in both markets still hitting their daily limit down.
Even Huaguo Zhonggong, the stock Su Yi had bottom-fished and established positions in, under extremely heavy selling pressure, and despite a massive trading volume of 8.7 billion yuan, still closed at its daily limit down.
The limit-down of Huaguo Zhonggong resulted in Su Yi's 100 million yuan of bottom-fishing chips incurring a loss of almost 5 percentage points intraday.
Facing a loss of nearly 5 million yuan in his stock account, Su Yi didn't pay much attention, nor was he the least bit nervous.
He knew that the Shanghai Composite Index would not fall below the 2850 point level established intraday today in the short term, and he also knew that if the market rescue failed once at this level, there would immediately be a second attempt.
Moreover, continuous positive policy directions and favorable regulatory news would also continue to be released.
Just as he had expected...
When the market once again saw a thousand stocks hit their daily limit down and made headlines, that afternoon, a high-level conference on economic topics was convened.
The top leaders, for the first time, specifically mentioned the stock market.
Subsequently, that evening, the Ministry of Finance announced that it would implement more robust proactive fiscal policies in the future.
At the same time, the central bank reiterated that the fundamental economic conditions at home and abroad were different, and the loose monetary policy strategy would continue in the medium to long term.
It also indicated that it might, in the future, release more liquidity into the market.
A series of concentrated positive news items were overwhelmingly released to the market.
Moreover, every single one of them was positive news with a significant impact on the current financial market.
The aim of all these positive measures was directly addressing the issue of market confidence.
Under so many positive influences.
The next day, the market opened higher again.
And this time, Zhengjin and Huijin expanded the scope of supported stocks, including all component stocks of the CSI 300 Index and China Securities 500 Index.
At the same time, the bottom-fishing and takeover funds surging from all sides were even more rapid, concentrating on bottom-fishing and snatching up chips for long positions in large batches.
With so much capital working together and making efforts.
The Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index all opened higher and continued to rise, creating a powerful profit-making effect in the early morning session.
Su Yi watched the major indices reversing their downturn and rebounding with strong momentum.
He was not in a hurry.
Nor was he too eager to increase his holdings of Huaguo Zhonggong stocks, which had already rebounded by around 6% and had successfully turned his account's positions from loss to profit.
He knew that, given the previous instances of opening higher on positive news and then falling sharply intraday, the market's panic sentiment would not be eliminated so quickly.
Once the concentrated long capital in the early trading session slightly waned, investor groups who had experienced continuous market beatings previously and whose confidence had collapsed, would still subconsciously concentrate selling to drive down prices.
Afterwards, when this wave of concentrated selling was absorbed.
The market would truly usher in a short-term oversold violent rebound, and a brief sentiment repair.
Indeed, as he continued to wait patiently.
As the long capital in the early trading session gradually waned, the selling pressure from stop-loss orders and trapped positions accumulated throughout the stock market crash once again gained the upper hand, continuously suppressing the indices and countless stocks in the market to fluctuate downwards.
And even at 2:00 PM in the afternoon.
A round of panic selling erupted, pushing the Shanghai Composite Index, which had been positive all day, down in one go to nearly 1 percentage point below the waterline.
However, this time, the panic selling, with the market's liquidity crisis not having further expanded, was strongly absorbed by the "national team" funds led by Zhengjin and Huijin, as well as noticeably stronger bottom-fishing funds.
Therefore, in less than 6 minutes after the Shanghai Composite Index fell below the waterline.
Under the continuous efforts of long forces from all sides, the major indices in both markets turned positive again.
"It's almost time!"
Su Yi saw that the last wave of panic selling had been cleared out, and the market was being absorbed by long capital.
He knew that this moment was the best time to concentrate on going long in the market.
So, without hesitation.
He stared intently at the Huaguo Zhonggong stock, which was at a gain of 3.75%, and was expanding its gains again as the index strongly counterattacked.
His over 500 million yuan in funds in hand, with overwhelming force, were all deployed.
In an instant, they transformed into super main buy orders totaling over 500,000 lots, sweeping away all selling orders at every level in front of Huaguo Zhonggong, and pushing its stock price up to the daily limit in one wave.
(End of chapter)
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