October 23 Pre-Market Plan: Under reduced volume and stagnation, the risk of market pullback intensifies

Yesterday, the overall performance of the market capitalization was strong. After opening lower in the morning, the three major indexes briefly turned positive during the session but ultimately failed to maintain the upward trend. In particular, the Shanghai Composite Index has approached recent highs, and a stagnation reversal signal has appeared at this position, compounded by a further reduction in market volume of 200 billion. Therefore, it is extremely difficult to break through and set new highs in the short term. As a result, the market is likely to continue its adjustment trend today, as market rules suggest: 'Since it cannot go up, it can only come down.'

In terms of external markets, U.S. stocks collectively adjusted, Chinese concept stocks continued to decline, and the A50 fluctuated and weakened. The weak performance from abroad will have a direct impact on the A-share market in the morning, and a lower opening has become a foregone conclusion; judging from the overall sentiment, the market's adjustment trend is clear today.

1. Short-term Focus: Relay of high-limit stocks, funds focusing on small caps.

The current market's biggest highlight is the relay situation of high-limit stocks. From yesterday's performance, funds are clearly banding together in the relay direction, with significant upgrades as expected; stocks at low levels moving from 2-to-3 and 1-to-2 are noticeably strengthening under the influence of the deep earth economy sector. In contrast, previously hot reversal trends are showing weakness, with Antai and Dayang being prime examples of this, even if Ruineng successfully reverses, the selling pressure remains heavy. This shows that with insufficient volume, market funds are gradually shifting focus to small-cap stocks with consecutive limits.

For high-limit stocks like Dayang, the current trend heavily relies on emotional support. If the opening price meets expectations without explosive volume, it's likely to be pushed upward by the market’s collective effort, and its opening performance can pretty much determine whether it will upgrade. However, from an investment value perspective, the risk of relaying at this position is high; even if it continues to rise, it’s more about profit-taking for holders.

2. Core Main Line: Continuation of deep earth economy speculation, strength observed amid stock differentiation.

The speculation heat in the deep earth economy sector is still ongoing, but the strongest stocks in the sector have shown a pattern change. Yesterday, Shihua outperformed Shenkai significantly; both had big single-limit performance, but Shihua has made an upward reversal. Today, the two stocks will likely maintain a competitive relationship, and judging from the strength of the sector and the shape of the stocks, the probability of continuing with single limits is quite high. Watch for potential T-limit opportunities due to sector divergence. Overall, as long as their opening prices maintain a non-explosive single-limit shape, the overall strength of the deep earth economy sector remains promising.

• Zhongzhong: As a stock with a relatively large market cap, breaking out with three consecutive limits would directly confirm the funding's recognition of the deep earth economy direction. However, the probability of opening with volume today is high; as the leader in the mining equipment branch of the deep earth economy, its T-limit opportunities are worth close attention.

• Yellow River: One of the most recognizable stocks in the market, positioned similarly to Shenkai and Shihua, its super-hard materials (deep earth materials branch) is the first direction to take off in the sector, with a clear advantage in the shape of continuous turnover. Although it faced pressure at the end of yesterday due to sector divergence, whether today's opening price can recover is key. If the recovery signal is clear and the super-hard materials sector performs in sync, it will likely attract continuous funding.

• Sinochem: An absolute strong stock in the second limit direction, as the leader in underground construction under the deep earth economy branch, it attracts much attention due to its alignment with large fund preferences. If the deep earth economy sector maintains its strength, its probability of opening with a single limit is very high; conversely, if the opening price strength is weaker than yesterday's, caution is warranted. From both shape and recognition, it is the core target for today's second limit upgrade.

Moreover, in the oil and gas direction (related to the deep earth economy), besides Shihua and Shenkai, which are exceptionally strong single limits, oil services and Molong have the highest recognition. Coupled with last night's surge in oil and gas prices, both are likely to strengthen: oil services have an edge in shape and strength, while Molong is favored in popularity and market cap. If Shihua and Shenkai continue to lock in single limits with no participation opportunities, funds are likely to shift towards these two, with the opening price strength directly determining funding preference.

In the first limit direction, Beiken has the highest recognition; if the oil and gas sector forms a strong sector effect, it will be the preferred target for low-position layouts.

3. Other Hotspots: Opportunities and risks in state-owned reform, real estate, and pharma.

1. State-owned Reform Concept: Recently, only Hubei’s state-owned reform has shown sector effects, but yesterday's end-of-day divergence with Guangdian's failure suggests that today’s divergence will further intensify, prioritizing relay lower than the deep earth economy. However, this direction can be monitored as a market barometer—yesterday after-market news from Shenzhen about state-owned reform released clear messages, suggesting future speculation may shift to Shenzhen state-owned reform targets. It’s worth noting that retail investors often react late to such hot topics, and by the time they realize it, there may be no arbitrage space left (like yesterday's Hubei Guangdian).

2. Real Estate Mergers and Acquisitions: As a long-term hotspot, Yingxin has upgraded with a super-strong single limit; although Huajian fell due to bad news, Hefei maintains its trend, and Shangshi shows potential for limit-up. Stocks involved in mergers within the sector are repeatedly active. Among them, Shen Zhenye, which performed weakly yesterday, is worth tracking today as it aligns with both "Shenzhen State-owned Reform" (after-market news) and "Real Estate Mergers" dual logic.

3. Pharma Sector: It's been buzzing lately, with Guangji making a strong show with its consistent single-limit rise. If it breaks out to a third limit, it’ll rally the entire pharma sector and could signal a return to high-speculation trading (the sector has been lacking high-profile leaders). Additionally, Te Yi showed a strong first limit after two consecutive failures; it has the potential to become a monster. If Guangji continues holding that big single limit, Te Yi will likely become a core choice for funds looking at a 1-to-2 strategy, making it a key target for today.

The content here is just a sharing of investment ideas and discussions, not actual trading advice.