2.4 It's time to choose a direction again!

$Aerospace Development (sz000547)$ Brief Note: After the start of the year, the three main directions—aerospace, AI applications, and precious metals—have all experienced peaks followed by pullbacks. On Tuesday, some precious metals began to rise again, so on Wednesday, most precious metals likely opened with a limit-up trend. Whether they can stop falling and rebound is uncertain, but it’s clear that the downward momentum for short selling is gradually weakening. The next step is for funds to choose a direction. But before choosing a direction, there’s an immediate issue—trading volume. With the Spring Festival approaching, trading volume is gradually decreasing, which is normal. However, for the market, a shrinking volume means it cannot break into a new cycle, which is also normal. The next key is to observe when trading volume stops shrinking; that moment, resonating with the index, will be the next main trend. Of course, before that, the market will show some clues, revealing funds’ attitudes toward various sectors, which can be seen through sector indices and other indicators. Everyone should pay close attention. Next, let’s analyze based on index levels and sentiment cycles:

1. Index Cycle Thinking:

If the index cycle prediction is correct, the short-term outlook is for recovery, and the medium-term is for correction. The recovery of the index on Tuesday was expected, but the rise in precious metals sectors made the index’s recovery even stronger. After all, many targets in the precious metals sector are aligned with the index direction. So when those limit-down stocks open up, the index naturally rises with them. However, a downside is that during the index’s big rally and recovery, trading volume shrank by over 40 billion, indicating that some funds chose to take profits during the rebound and did not participate further. As the Spring Festival approaches, trading volume may further decrease, so the index is expected to maintain a recovery, followed by oscillation and a subsequent correction. This is the current thinking on the index cycle.

2. Sentiment Cycle Projection:

First, Long-term Analysis: Two days into February, based on market understanding, the main cycle still revolves around the recovery of the January 22 commercial aerospace sector. For example, on Tuesday, the leading sectors were space photovoltaics, AI applications, and optical communications—these were the sectors leading the rally, with their turning points all on that day. Regarding space photovoltaics, regardless of how it moves, it is essentially a branch of commercial aerospace. From this perspective, it remains within the broader aerospace cycle. However, with the Spring Festival approaching and the aerospace sector being large, sustained upward movement will be difficult without increased trading volume. Attention should be paid to the rhythm. As for the Long-term (True Dragon) analysis for February, since the current upward sectors are all old sectors, no new stocks with driving momentum have emerged yet.

Second, Opportunity Analysis: The index rebounded broadly on Tuesday, reaching a climax of recovery, with nearly 5,000 stocks rising. This contrasts sharply with Monday’s sharp decline, and such a rapid recovery indicates a market peak. Meanwhile, trading volume shrank, showing that some funds chose to withdraw during the rebound. As the Spring Festival approaches, trading volume is likely to continue shrinking. Following this logic, the market will probably follow the predicted core sectors of group speculation: the core of aerospace, space photovoltaics, and the three points often discussed—AI applications, GEO ports, and AI computing power. For AI applications, targets with revenue are key. As for precious metals, silver and copper can still be watched, but since the current decline is only the third day, it’s recommended to revisit precious metals around Thursday or Friday. These three directions are the hottest before the Spring Festival this year. Developing new directions is difficult, but if there are any, they should be monitored promptly. Based on February’s expectations, trading before and after the Spring Festival is not ideal; the overall strategy should be group-based, following the article’s approach—participate at the bottom, gradually sell during recovery. This approach offers higher chances of success. During the index’s recovery, the three main directions may see a re-evaluation by funds, so it’s advisable to observe which side is stronger and participate accordingly.

Special Reminder: The above information is for reference only and does not constitute investment advice. No stock recommendations are provided! Investing involves risks; please proceed with caution!