A Major Divergence in Computing-Power Coordination for the First Time: Wash-Out or Peak?

Hello everyone, the weekend is coming again. Today’s market momentum was weak, but our accounts still maintained a red day for a week, which is fortunate as we focused on strong stocks. Also, this morning we promptly took profit on some holdings with a high-throw strategy! The electric synergy sector, after a continuous surge, has as expected experienced its first major divergence. This not only tests the resilience of bullish funds but also serves as a key indicator for judging whether this round of market is “sharp” or “freaky.” [Taogu Ba]

By comparing historical data and analyzing top-tier themes (such as the December 16, 2025 commercial aerospace sector) during their first divergence phase, combined with current market data, we can see through the intraday fluctuations and assess the quality of this wave of main upward movement in the electric synergy sector.

1. Divergence Strength Debate: Referencing commercial aerospace, today’s divergence is a “benign strong divergence.”

To judge divergence strength, first define “strong divergence” (distribution-type divergence) and “weak divergence” (shakeout-type divergence). Strong divergence typically features: core high-flyers directly hitting limit-up (limit-up or limit-down), no active stocks within the sector, mid-cap stocks plummeting, and widespread loss effects. Weak divergence features: lagging stocks dropping out, mid-cap stocks consolidating sideways, core high-flyers although weak but still capped or strongly supported, and sector rotation with new sub-branches leading the rally. Comparing with the commercial aerospace sector’s first divergence on December 16, 2025, I recall writing an article about that initial major divergence. The market characteristics that day were very typical: one side was water, the other was fire. That day, Hualing Cable hit four consecutive limit-ups, Tongyu Communications, Aerospace Information continued to hit limit-up, but Aerospace Development closed with a failed breakout, Aerospace Mechanical & Electrical and Leike Defense showed noticeable pullbacks. It was a classic “weak to strong” divergence day—front-line stocks remained resilient or resistant to decline, while laggards started to fall behind. This divergence did not end the trend but laid the groundwork for subsequent repeated activity.

Comparing to today’s electric synergy sector:

1. The limit-up ladder has broken, but the core leaders remain strong: The key observation today is that “3 into 4” green power companies, like Lvfadian Power, once hit limit-up and made four consecutive limit-ups but then opened. If it cannot re-close like Aerospace Development did previously, it signals divergence. However, it dared to test the board and showed strong support without large downward moves, indicating strength. Mid-cap leaders like China Energy Construction and GCL New Energy continued their trend yesterday, hitting new highs with strong support, and today, during divergence, they did not see large volume declines but maintained red or small dips. This shows big funds are not panicking but are locking positions or doing T+ trades. The stability of mid-cap stocks is a key factor for quickly repairing sector divergence, and two other large caps, China Power Construction and China Nuclear Construction, also hit their first limit-up.

2. Low-position rebound momentum remains intact: Today, although high-flyers diverged, funds did not abandon the sector entirely. Instead, they moved into lower-priced sub-sectors (such as wind power, stimulated by UK tariff news), as well as coal, nuclear, and chemical energy sectors. This indicates that the core logic of “computing power driving electricity/energy” is being deeply explored and horizontally expanded by the market, rather than simply cashing out. Examples include Zhengzhou Coal Electricity, China Power Construction, China Nuclear Construction, and Lansi Heavy Equipment.

3. Control of loss effects: Today’s divergence mainly concentrated on short-term over-extended sentiment stocks (such as Hanlan Co., Shunna Co., Yunnan Energy Holdings, Jinkai Shares, etc.), as well as hardware sectors affected by US tech stocks’ decline last night (like CPO, semiconductors, computing power). For core electric stocks in the electric synergy sector, divergence appeared but without large-scale limit-downs. This manageable loss effect is a typical “technical adjustment,” not a “trend reversal.”
   Based on comparison with the first phase of commercial aerospace, today’s divergence in the electric synergy sector is highly similar in strength and structure—defined as “moderate”—strong in core stock support, weak in follow-up stocks falling behind.

4. The performance of core stocks determines life or death: Using market details to judge future expectations and trends.

Divergence days are the best testing ground—they reveal who is “swimming naked,” who is wearing “iron pants,” who resists declines best during divergence, and whether the breakout of certain sub-branches signals high or low within the sector. By analyzing the performance of strong and weak stocks today, we can gain insights.

The breakout leader, Green Power, after challenging four limit-ups, opened and showed volume but refused to fall sharply, acting as a pioneer. As long as it doesn’t get heavily sold off, sideways consolidation remains strong. Mid-cap leaders like China Energy Construction and GCL New Energy continued their trend, resisting deep correction, showing institutional and retail buying support, serving as the sector’s “stabilizer.” As long as they don’t break down, the trend remains intact. Low-position rebound stocks like Huaneng Energy showed strong early momentum and may even challenge for further upgrades, maintaining heat and being key to intra-day divergence-to-convergence. The prior rotation was quite sufficient. Regulatory period high-flyers like Yunnan Energy, with market attention on their post-regulation feedback, will influence market sentiment. Today, they showed resilience but closed with a limit-down, which can be seen as a deliberate move by major players to clear recent profits and follow-up positions.
For first-limit-up rebound stocks like China Power Construction, China Nuclear, and Lansi Heavy Equipment, which are related to nuclear power within the power sector, it’s worth revisiting their low-position rebound opportunities. Many stocks that lagged behind, such as some optical module popular stocks, surged then fell back into the red, showing loss effects. Funds are shifting from pure concept speculation to more logical, substantive directions.

Regarding the future outlook for the electric power sector:

1. Short-term trend (early next week): The sector is unlikely to enter a second main wave of rally immediately but will go through a “divergence to repair—branch switching—then divergence to convergence” elimination phase. Next Monday is critical. If core stocks that resisted decline today (like Green Power, China Energy Construction, GCL New Energy, Yunnan Energy) can quickly rebound or recover, the trend will continue strongly; if core stocks continue to fall, divergence will intensify, and correction will prolong.

2. Mid-term trend: Since “electric synergy” was included in the government work report and labeled as “new infrastructure,” its policy importance is comparable to 5G or new energy at the time. Therefore, this rally is not a short-term speculative move but a large theme spanning quarters or even a year. After the first divergence, more intense second and third waves are likely, with leading sub-sectors shifting from pure “electric power stocks” to “electric power equipment,” “energy storage,” or even “computing power dispatch,” with opportunities to follow sub-branch leaders.

3. Personal operation ideas after divergence:

Based on the judgment of “the first benign major divergence,” subsequent strategies should not be panic selling but rather “using divergence to adjust positions, rotate stocks, favoring the strong and avoiding the weak, focusing on core assets.” Here are some suggestions:

• For holders: Don’t sell core holdings due to intraday fluctuations. If you hold core high-flyers or mid-cap stocks (like Green Power, China Energy Construction, China Power Construction, GCL New Energy), as long as they don’t break below the 5-day or 10-day moving average, hold with tolerance for volatility. As the trend is more suitable for mid-cap stocks, you can do T+ trades but avoid clearing positions prematurely to prevent missing out in a bull market. For lagging follow-up stocks, consider selling during next week’s potential rebound, as they tend to only rise slightly in the next rally and fall sharply during corrections—this is the essence of “de-weakening and strengthening.”

• For cash holders: Observe the core stocks’ opening behavior next week. Many who chased high today are likely trapped. The correct approach is to watch the entire day, look for stocks that can maintain red or small dips during divergence (without breaking moving averages), and identify “separation confirmation points.” Focus on stocks that resist declines during sector dips, such as those that sideways or slightly rise when the sector drops. These indicate active support and potential for Monday’s rebound. Pay attention to “high-level active stocks,” like Green Power—if they are picked up early next Monday, they could be short-term opportunities. Also, monitor “mid-cap low-buy” stocks like China Energy Construction, which after a big rise, pull back to the 5-day line—standard trend-following signals. For newly fermented nuclear power stocks like China Power Construction, China Nuclear, and Lansi Heavy Equipment, review their low-position rebound opportunities.

• Watch sector rotation and branch conflicts: Today’s strength in chemicals and nuclear power sectors is actually a “co-occurring theme” or “rotation theme” during the electric synergy divergence. If next week the electric synergy sector recovers strongly, these themes may diverge. But if the divergence in electric synergy is too large, these branches may also divert funds. In trading, focus on the main line: if core stocks in electric synergy offer good low-entry points, prioritize them; if they all open high and then decline, consider shifting to branches for risk hedging.

Today’s market was dragged down by external factors and profit-taking, but the probability of a subsequent rally remains high. Today’s divergence in electric synergy can be seen as a “mid-term break” in the main upward wave. Referencing the 2025 commercial aerospace trend, as long as core high-flyers do not show continuous loss effects and mid-cap stocks remain stable, this divergence is an excellent opportunity for trapped funds to re-enter. In terms of operation, avoid panic selling today or blindly bottom-fishing. Wait patiently for divergence to fade, load your bullets, and focus on core assets that remain resilient through storms, preparing for the next wave of market movement.

The above is my personal analysis—please do not blame for correctness or errors. The stock market involves risks; invest cautiously!

This post specializes in catching breakout rebounds, deep core theme mining, and main line logic prediction. Skilled in early detection of market core directions using strategies like limit-up with huge volume, breakouts, and rebound tactics, accurately capturing early opportunities. Has a systematic framework for analyzing breakouts and rebounds based on volume-price relationships, able to identify key cycle points such as initiation, shakeout, retracement, and acceleration from volume, chips, and patterns, enabling proactive layout and trend following. Committed to using a patterned, systematic approach to identify strong stocks, focusing on capturing main upward wave stocks, and leveraging practical systems to grasp trend opportunities.