February completes a perfect consolidation, with March expected to see index fluctuations and an accelerated upward trend!

Victory in February has ended, and March is a crazy honeymoon period. I held a continuous 50% position in February for a while, and starting today, my position is up to 70%! [Taogu Ba]

Leading the way, spring market, accelerated trend—any bear scare tactics can’t compare to the power of the bulls. Everyone around us is bullish!

In December, when the index was at 3815 points, I said it would rise for a month, and ultimately, we saw 17 consecutive days of positive closes. Opportunities are always prepared for those willing to seize them.

The A-share market in February showed steady index growth, prominent structural opportunities, and sustained active trading volume. The Shanghai Composite index had three consecutive positive monthly closes, consolidating at high levels after a volatile upward trend. Trading volume exceeded one trillion yuan for several days, with multiple breakthroughs of 2 trillion yuan in late February. Risk appetite among funds significantly increased. This month’s trend was driven by policy preheating, industry catalysis, and price increase logic. Sector rotation accelerated, with both technology growth and cyclical resources running in parallel, laying a solid foundation for a “shock and accelerate upward” trend in March!

1. February Summary:

1. Volatile rise, healthy volume and price, structural differentiation

In February, the overall movement of A-shares was a volatile upward trend within a high-level consolidation channel. The Shanghai Composite index stabilized above 4100 points, with strong support at 4130 points. By month-end, it closed near 4162 points. Market volume was abundant, with daily trading exceeding one trillion yuan becoming normal, and incremental funds continuously entering. Northbound funds and industry capital were active in both directions. The index showed strong support during pullbacks, with no systemic risks.

Personally, I believe the market’s rhythm was influenced at the start by the Spring Festival holiday and external strength, opening high; mid-month saw slight retracements and consolidation; and late month, under the expectations of the Two Sessions and industry catalysis, it strengthened again. High-level oscillations at month-end digested profit-taking. In terms of style, growth outperformed value, sector themes outperformed blue chips, and thematic investments were far more active than the general rise. Profitability was concentrated in main sector themes, while non-mainstream sectors performed flatly.

2. Core themes: dual main lines leading the rally, rotation accelerating (price increase cycle + AI technology dual drivers)

1. Cyclical resources (price increase main line): The strongest theme this month, with sectors like non-ferrous metals, rare earths and permanent magnets, minor metals, phosphate chemicals, oil and gas exploding. Prices of tungsten, rare earths, indium, and other commodities continued to rise. Leading companies like Zhangyuan Tungsten and Northern Rare Earth surged significantly. The logic was global supply contraction and domestic environmental restrictions, with price increases directly boosting earnings expectations. Capital grouping effects were prominent, with price hikes and cyclical factors becoming new main lines.

2. Technology growth (computing power and domestic substitution): AI computing power, semiconductor equipment, leasing of computing resources, PCB sectors led gains, benefiting from policies on “artificial intelligence + advanced manufacturing,” accelerated domestic substitution, and rising overseas demand for computing power. High-level optical modules, CPO, semiconductors, and domestic computing hardware showed relative resilience, becoming core supports for the tech sector. Additionally, new expectations emerged for substitutes like Yizhong Tian (Yizhong Tian’s replacement products), with Longfei Optical Fiber, Hengtong Optoelectronics, and Honghe Technology leading the charge. Institutional rebalancing and stock rotation were well executed.

3. Power, energy, and infrastructure: Power grid upgrades, energy storage, and power operation performed steadily, driven by increased energy infrastructure investment, rising electricity demand, and the continued implementation of dual-carbon policies. The sector exhibited low volatility and high certainty, suitable for conservative funds. Especially with AI computing power, AI smart grids performed well at month-end, with “Yuan Energy Holdings” hitting seven consecutive limit-ups, doubling in value. Market height and strength were unlocked here.

4. Adjustment directions: High-flying AI applications, film and media sectors experienced pullbacks due to excessive gains and earnings verification issues. Funds shifted from pure themes to hard assets with performance, catalysis, and barriers. After the Spring Festival, stocks like Bona and Hengdian faced negative feedback due to underwhelming box office results. Retail investor expectations for Spring Festival robots were overly high, and post-holiday, funds cashed out. AI applications and robots, being retail favorites, are expected to see retail exit in March, with funds shifting again.

5. This month marks the second half of the spring turbulence and the first half of the Two Sessions preheating. The driving force shifted from liquidity expectations to industry prosperity and earnings forecasts. The market completed a high-low switch, with dual main lines of cyclical and technological sectors established. Trading volume and sentiment supported continued trend, providing a solid foundation for accelerated upward movement in March.

6. March A-share market expectations: accelerated oscillation upward, with performance and policies resonating

1. Accelerated oscillation upward, Shanghai Composite target at 4200-4300 points!! Expectation of more than 7 consecutive positive days!

In March, the market will continue its pattern of oscillating and accelerating upward, with increased volatility but an overall upward trend. The core drivers are threefold: first, policy implementation from the Two Sessions—new productive forces, AI+, high-end manufacturing, and steady growth are clarified; second, annual and first-quarter earnings forecasts will be released intensively, shifting focus from themes to performance realization; third, liquidity remains reasonably ample, with continuous inflow of incremental funds supporting index breakthroughs.

My personal view is that in early March, policy preheating and fund inflows will push the index higher; mid-month, during the Two Sessions, sector rotation will accelerate and volatility increase; late month, earnings verification will favor strong stocks and weed out weak ones, with main sector themes accelerating upward.

2. Core themes for March

Pro-cyclical performance themes: resource price increases (rare earths, minor metals, chemicals), computing hardware (semiconductor equipment, PCB, liquid cooling), power and grid sectors—those with earnings growth are enjoying valuation premiums.

Policy-driven themes: new productive forces, humanoid robots, low-altitude economy, commercial aerospace, brain-computer interfaces—expect policy surprises during the Two Sessions to create pulse opportunities.

Potential recovery at lower levels: high-dividend state-owned enterprises, large financials, and segmented consumer leaders—resonating with defensive attributes and rebound needs. Special mention: Baishui (White Water), which is expected to have a major rally by 2026; the specific timing depends on policy responses to internal competition and increased efforts to stimulate domestic demand.

3. Personal trading strategy for March:

1. Maintain core positions at 70-80%, with rolling adjustments!

Core holdings: 30%—allocate to sector leaders in price-increasing chemicals, computing hardware, non-ferrous metals, AI, and power sectors based on individual stock-picking ability (3-5 stocks);

Flexible holdings: 20-30%—engage in low-buy, high-sell on main themes, seize rotation opportunities.

Reserve funds: 10-20%—prepare for dips, maintain liquidity, avoid full or heavy concentration in a single sector.

For sectors and core stocks with sustained momentum, the strategy remains to buy on dips.

2. Specific operation methods

First, prioritize sector-leading stocks for relay plays. For skilled stock pickers, achieving 2-3 stocks with over 5 limit-ups in a month is a good target.

Second, use breakouts, rebound after gaps, and large-volume bullish and bearish signals to buy core stocks. For most non-leader relay players, base on logic of low buying after gap-ups or rebounds, avoid chasing highs, keep single-sector positions below 30%, and diversify stocks. If a sector shows strong persistence, consider focusing core positions on key stocks within that sector.

The market has now completed consolidation, established main themes, and accumulated volume, with dual leadership from cyclical and technological sectors, laying a solid foundation for March. The market is entering a window of policy and earnings resonance, with oscillation and acceleration as the main tone. Opportunities are concentrated in main sector themes with confirmed earnings and policy benefits.

In trading, stick to main themes, rotate actively, strictly control positions, and follow discipline. Seize the opportunities of the spring market’s second half to achieve steady gains. I also hope everyone masters the core relationships between volume and price, as well as core operational strategies. In February, many friends achieved excellent results, with profits over 20%, and almost no losses. Your efforts and learning will help you achieve satisfying results in March!

This is our February summary. Let’s keep up the good work in March and see our accounts stay in the green!!