In youth, I didn't know that small groups are good, and I mistook quantification for treasure.

** Short-term Core Philosophy: Unity of knowledge and action, operate within your own model understanding, focus more on personal growth internally, control position sizes to manage drawdowns, slow is fast. ** [Taogu Ba]

Tuesday (February 24), the A-share market welcomed the first trading day of the Lunar New Year of the Horse with a “good start.” The Shanghai Composite Index closed up 0.87%, at 4,117.41 points, successfully returning above the 4,100-point mark; the Shenzhen Component Index rose 1.36%, closing at 14,291.57 points; the ChiNext Index increased 0.99%, at 3,308.26 points. Market activity was lively, with total trading volume in Shanghai and Shenzhen reaching about 2.22 trillion yuan, an increase of approximately 219.4 billion yuan compared to the last trading day before the holiday.

Hong Kong stocks, however, showed weakness, with the Hang Seng Index down 1.82%, closing at 26,590.32 points; the Hang Seng Tech Index fell 2.13%, at 5,270.70 points. The market displayed a clear divergence between domestic and international markets, with A-shares broadly rising while Hong Kong stocks retreated.

01 Index Trends: The three major indices all opened high and moved higher, with trading volume expanding to 2.22 trillion yuan

Today’s market showed a strong pattern of opening high and rising further. At the open, all three major indices surged over 1%, with the Shanghai Composite up 1.15%, the Shenzhen Component up 1.52%, and the ChiNext up 1.70%. Although there was some pullback during the session due to profit-taking before the holiday, buying pressure continued to support the market, and all three indices ultimately closed higher.

A significant increase in trading volume was a key feature today. The total trading in Shanghai and Shenzhen reached about 2.22 trillion yuan, up 219.4 billion yuan from the last trading day before the Spring Festival (February 13), an approximately 11% increase, indicating active replenishment of funds after the holiday.

From market breadth perspective, over 4,000 stocks rose, with a nearly 16:1 ratio of advancers to decliners, showing an unusually broad rally. A total of 4,003 stocks in the two markets and the Beijing Stock Exchange rose, while 1,388 declined, and 86 remained unchanged.

02 Sector Highlights: Cyclical resources explode across the board, AI applications and film/TV theaters undergo deep correction

The market showed extreme divergence. Cyclical resource sectors led the rally today, with oil and petrochemical stocks soaring 5.53%, building materials up 3.71%, and basic chemicals up 3.45%.

Oil and gas stocks surged to limit-up, with more than ten stocks including Tongyuan Petroleum, QianNeng Hengxin, and CNOOC Services hitting the daily limit. The catalyst was the continued strength of international oil prices during the holiday, with Brent crude reaching a six-month high. The chemical sector also performed strongly, with Meibang Shares hitting four consecutive limit-ups, and Xingfa Group, Chuanfa Longmang, and others seeing over 20 stocks hitting the limit.

Precious metals concepts rapidly rose, with Xiaocheng Technology up over 15%, and Hunan Silver hitting the daily limit. On the news front, spot gold touched $5,200 per ounce, the first time since January 30.

On the downside, AI applications and film/TV theater sectors suffered heavy losses. Media stocks fell 3.20%, and computer stocks declined 1.81%. Film and TV concept stocks collectively plunged, with Light Media and China Film hitting the daily limit down. This was directly related to the underwhelming box office during the Spring Festival holiday, with the first six days’ box office down 38.7% year-over-year as of February 23.

03 Capital Flows: Main funds net inflow of 1.29 billion yuan, northbound funds net purchase of 3.86 billion yuan

In terms of capital, the market showed a pattern of combined domestic and foreign buying.

Main funds had a net inflow of 1.29 billion yuan throughout the day, showing structural inflows. Notably, main funds in the ChiNext experienced net outflows of 5.956 billion yuan, and the STAR Market saw net outflows of 3.493 billion yuan, while the CSI 300 component stocks had a net inflow of 7.668 billion yuan.

Northbound funds bought a net 3.86 billion yuan, a moderate inflow level. Foreign investors favored undervalued large-cap stocks with high dividends and some tech targets.

Southbound funds bought a net 3.131 billion Hong Kong dollars, significantly lower than the previous day’s (February 13) 20.219 billion HKD. The slowdown in inflows increased pressure on the Hong Kong market’s correction.

From industry capital flow perspective, electronics, non-ferrous metals, and telecommunications sectors saw large net inflows of 5.413 billion, 5.195 billion, and 4.764 billion yuan respectively. Conversely, computer and media sectors experienced large net outflows of 12.907 billion and 6.971 billion yuan.

04 Thematic Outlook: Post-holiday effects emerge, funds “abandon high, chase low, shift from soft to hard”

In the current market environment, post-holiday effects and fund reallocation are resonating.

Funds are showing a pattern of “abandoning high, chasing low, shifting from soft to hard.” Profitability is concentrated in cyclical sectors, while within tech growth, there is a divergence of “hardware strong, application weak.” AI hardware such as optical modules and storage chips are performing relatively well, while high-position themes like AI applications and short-form gaming are taking profits.

Global stagflation trading logic is re-emerging after the holiday. During the Spring Festival, tensions between the US and Iran intensified, boosting crude oil and non-ferrous metal price expectations; the Baltic Dry Index hit a new high, boosting shipping sector outlook. The financial and commodity attributes of resource products are forming an upward synergy.

Hong Kong stocks’ correction reflects sensitivity to global liquidity. Yesterday’s surge was driven by the US Supreme Court overturning tariffs imposed by the previous administration, but trading volume did not expand significantly. Without Northbound capital participation, it appeared more like a technical rebound rather than a trend reversal. Today, Northbound trading resumed but inflows slowed, directly causing the index to retreat.

05 Tomorrow’s Outlook: Focus on sector rotation rhythm and Two Sessions policy expectations

Looking ahead, the following factors are worth close attention:

Sector rotation rhythm may become a key short-term market driver. The spring rally is expected to continue, with a likely pattern of sector rotation and oscillating upward movement. Based on policy support and industry trends, sectors like photovoltaic (space PV, HJT technology), commercial aerospace, and non-ferrous metals may still have new catalysts.

Two Sessions policy expectations could serve as new catalysts. As the 14th Five-Year Plan approaches, policies related to new productivity and emerging industries may be refined and implemented. The market may revolve around policy-driven themes, with funds competing around industry lines aligned with policy guidance.

Global geopolitical and commodity prices remain closely watchable. Tensions in US-Iran relations, shipping capacity expectations, and other factors will continue to influence cyclical sectors’ outlook.

Currently, short-term themes are weak, and the market is mainly driven by quantitative funds rotating, with rebounds at low levels and profit-taking at high levels. We await the Two Sessions themes in March for a potential short-term revival.

06 Sector and Stock Picks:
**
Chemicals: Hongbaoli, Shandong Fiberglass, Meibang Shares (Three Brothers Stocks);**
**
Telecommunications: Changfei Optical Fiber, Farsight;**
**
Oil & Petrochemicals: Intercontinental Oil & Gas, Zhun Oil, Tongyuan Petroleum;**

Computing Power: Yunnan Energy Holdings, Roman Shares, Dawi Technology (Market Bearish);

07 Limit-up News Highlights:

① Two Sessions expectations - The 2026 Two Sessions will be held in Beijing on March 5; the “14th Five-Year” plan emphasizes strategic emerging industries such as AI, quantum information, commercial aerospace, 6G communication, low-altitude economy, and high-end new materials. (Shunwang Technology, University of Science and Technology of China Innovation, Hongxin Electronics, Tianyin Mechanical and Electrical, Hangyu Micro, Sifang Jingchuang, Xinwei Communications, Capital Online, etc.)

② Computing power / Optical communication - Explosive demand for AIDC drives fiber optic price and volume increase, with China’s G.652.D single-mode fiber reaching near seven-year highs, averaging over 35 yuan per fiber-kilometer. GLM-5 technical report: full disclosure of technical details, embracing domestic computing ecosystem, with demand outstripping supply, and Zhitu Network seeking partners across the network; (Computing: Shunwang Technology, Hongxin Electronics, Yunnan Energy, Hangyu Micro, Capital Online, University of Science and Technology of China, Xinjin Power, etc.; Optical communication: Farsight, Changfei Optical Fiber, Yangtze River Communication, Huamai Technology, Tongding Interconnection, Huagong Technology, etc.)

③ Chemicals / Fiberglass - The US announced key strategic materials including phosphorus and glyphosate herbicides, with international phosphate fertilizer prices surpassing $700/ton. Rising costs and tight supply will trigger a second round of price hikes in fiberglass manufacturing, with planned monthly increases of 10-15%. (Chemicals: Meibang Shares, Jinniu Chemical, Hongbaoli, Yuntianhua, Yinglite, Sanyou Chemical; Fiberglass: Honghe Technology, Shandong Fiberglass, International Composites, China Jushi, Zaisheng Technology, etc.)

④ Commercial aerospace - 2026 will be a “decisive moment” for commercial aerospace. Brazil’s telecom regulator Anatel has approved the Starlink satellite constellation to operate in Brazil from 2026; Elon Musk: Starlink will soon operate beyond Earth. (Tianyin Mechanical and Electrical, Hangyu Micro, Hongxin Electronics, Xinwei Communications, Capital Online, Zaisheng Technology, Yangtze River Communication, Fuhuo Communications, etc.)

⑤ Robotics - Yushu released the quadruped robot Unitree As2; Honor plans to launch its first humanoid robot. (Hongxin Electronics, Hangyu Micro, Fengyu Zhu, Baili Technology, Tianrun Industrial, Huazhi Jie, etc.)

⑥ Oil & Gas - The US continues to reinforce troops in the Middle East, tensions between the US and Iran intensify, and crude oil prices have recently risen. (Tongyuan Petroleum, Zhun Oil, Zhongman Petroleum, Shandong Molong, Intercontinental Oil & Gas, etc.)

Today’s Operations:

1. Cut off stocks hitting limit-up and then stop following Hangdian Shares.

2. Watch Lio Shares towards the end of the session.

Current market conditions favor quick arbitrage; if you can’t hold, it’s about who can run faster. Don’t overcomplicate the pattern. Buying late in the day is relatively safer; intra-day, the market is highly volatile and hard to grasp.

Growth Philosophy:

My personal approach is “fish first, then fishing.” Fishing isn’t something you master in a week or a month, but catching fish first gives you the capital to make mistakes. The first step in fishing is improving your aesthetic judgment, not doing technical analysis, because without a complete model, relying on a single indicator is more superficial than substantial. Cultivate your aesthetic, focus on core insights, and feel the high premium of prediction and anticipation. Like the saying: “Read three hundred Tang poems thoroughly, even if you can’t compose poetry, you can recite.”

For learning, you either learn correctly—making your efforts more effective—or explore on your own. The worst is starting to learn and being misled into chaotic, useless knowledge. Many newcomers use jargon without understanding, talking a lot but mostly wrong. Sometimes, when you try to correct them, they stubbornly cling to their misconceptions, because they’ve been brainwashed with bad habits and their thinking is rigid. They can’t grasp the worldview of stocks; everything is conspiracy theories, luck-based, and backtesting is useless. They just close their eyes and pick randomly, believing success or failure is fate.

I believe “fish first” because once people start eating the fish, they will correct their understanding of the market and admit that their old, unprofitable methods are wrong. If you follow for over a month, you’ll notice your aesthetic judgment in stock picking gradually improves—that’s the effect. One day, you’ll realize that your view of the market has changed; all candlestick patterns and stock movements become clear. Enlightenment is built on strong foundational knowledge and daily practice.

Therefore, the direction of learning is very important. If you lack insight, you need to follow others. There are countless paths, and you will find the one that suits you. Every Friday, we welcome more friends to join our journey across the stars and seas!

Enlightenment Post: https://www.tgb.cn/a/2lWOT33PF2x

Thanks to @Jijing Rushui@ for the support with the fuel voucher!

Thanks to @Bu Gan Gao Diao@ for the tips!

Wishing everyone who likes and tips a prosperous stock market in 2026!