Major indices climbed across the board today, with the Shanghai Composite up 0.46%, the Shenzhen Component up 1.32%, and the ChiNext Index up 3.11%.
Market turnover reached 1.69 trillion yuan, an increase of 171.9 billion yuan from yesterday.
Advancing stocks numbered over 3,500, with the median gain at 0.59% and the average share price index up 2.21%.
Three positive phenomena emerged in today's market.
First, AI hardware surged, with Yi Zhong Tian stocks rising over 13% each, and first- and second-tier optical communication and PCB supply chain names such as Yuanjie Technology, King Brother Electronics, WUS Printed Circuit, Accelink Technologies, Cambridge Technology, Dongshan Precision, and Shennan Circuits hitting the daily limit.
The rally in AI hardware was closely tied to news developments.
One was a rumored Microsoft-related development abroad that clearly boosted the optical module sector.
Second, according to the Financial Times, Anthropic's underwriting banks are considering pushing its IPO valuation above $1.5 trillion, whereas market expectations just days ago were only $1 trillion to $1.2 trillion.
Third, Bloomberg reported that OpenAI's quarterly revenue reached $10 billion for the first time in the three months ending in September.
On the intraday chart, some large AI hardware names showed clear institutional accumulation, indicating that institutions are stepping up.
Some retail investors are asking: Is it time to believe in "light" again?
Additionally, South Korean stocks rose sharply today, and Nasdaq 100 futures gained more than 1% during A-share trading hours, spurring strength in A-share technology stocks.
Second, today is November 11, breaking the usual pattern of market adjustments on "Double Eleven" day.
Finally, defensive sectors continued to pull back.
The liquor sector index fell 2.69%, essentially a medium-sized bearish candle.
The banking sector, the core of the defensive direction, saw only a small decline today but dipped slightly in the afternoon.
On the broader market, Brother Da mentioned yesterday that the market was nearing a small-direction turning point.
Based on today's performance, the signs are becoming somewhat clearer, pending the Shanghai Composite breaking above its October 27 high to confirm the rebound trend.
Beyond that, two important signals in the market deserve attention.
One is the average share price index.
This index gapped up yesterday and rose 2.21% today; a gap-up plus a near medium-sized bullish candle is generally a signal of continued gains.
The average share price index also released an important signal: it gapped up 4.26% over the past two days, and merging the two days' candles into one also forms a gap-up medium bullish candle, similar in nature to the gap-up medium bullish candles on April 8 and August 4.
In both of those prior periods, the market subsequently saw a rebound rally.
Second is the signal from ETFs related to the former leading index, the ChiNext Index.
Among ChiNext-related ETFs, ChiNext ETF E Fund (159915) is the ETF with the largest turnover, and its movements can represent the direction of the ChiNext Index.
Looking at recent trends, ChiNext ETF E Fund shows a high degree of similarity to its movement from late April to early May 2022.
After that late-April 2022 bottom, both ChiNext ETF E Fund and the ChiNext Index launched a two-month rebound.
Overall, multiple positive phenomena appeared in today's market, with the guidance from the average share price index and ChiNext ETF E Fund being more evident.
Brother Da believes the probability of an upward market turning point is relatively high, with only the confirmation signal of the Shanghai Composite breaking above its October 27 high still needed.
In terms of sectors, AI hardware-related communication equipment, components, and upstream semiconductors ranked in the top three of industry sector gainers, with the communication equipment sector index surging 7.39%.
Brother Da noted yesterday that AI technology stocks did not open high and close low, and many core stocks began to see increased volume in recent days, indicating they are in a phased bottom area after a massive decline.
Although today's rally slightly exceeded expectations, it is not particularly surprising.
On the news front, according to Bernstein analyst Daniel Zhu's latest research report, based on Coherent's disclosed figure of $15,000 in content value per 100 Tbps of chips, an 8-rack Rubin Ultra computing cluster (Pod) generates an optical content opportunity of about $5.4 million, more than 5 times the approximately $1 million under the previous Vera Rubin NVL72 architecture.
On the AI application side, the media sector continued to rise but pulled back after 1:50 PM.
The heavyweight core names saw a more noticeable retreat, while other stocks pulled back within normal ranges.
Does the surge in AI hardware and the pullback in media signal that the AI application rally is about to fizzle out?
Brother Da believes there are currently no obvious signals of a fizzle, such as front-row stocks, core names, or leaders falling sharply, or closing with a medium bearish candle or near one and then making up the losses the next day.
Based on today's performance, none of those three categories of stocks fell sharply or closed with a medium bearish candle.
Moreover, aside from those three categories which have risen considerably recently, other stocks have not gained much and have only just left the bottom area or are still in it.
However, if media front-row stocks, core names, or leaders close with medium-to-large bearish candles tomorrow, the sector will face consolidation pressure.
On the AI hardware side, attention should be paid to the movements of core large-cap names.
If they perform strongly, they will lift the sector; if they perform weakly, the sector's upward momentum may not be strong.
Turning to today's news.
The UK approved two major offshore wind projects in the North Sea, with total investment of 12 billion pounds, the largest of their kind.
CITIC Securities noted that China is increasing policy support for offshore wind, and deep-sea project development is expected to accelerate; European offshore wind supply chain procurement demand is building for a new round of volume growth, and both domestic and external demand could reach a growth inflection point.
For core supply chain segments such as pipe piles and submarine cables, the domestic deep-sea trend will drive product specification upgrades and value increases, and push share concentration toward leaders; European local capacity is structurally tightening, opening up overseas opportunities for leading manufacturers with manufacturing advantages and global supporting capabilities.
CITIC Securities further noted that domestic and international project tenders and supply chain orders are expected to recover first in 2027, and a new phase of product shipment and earnings growth realization may begin in 2028, favoring offshore wind core equipment leaders with advantages in technology, products, and market share.
Finally, Brother Da offers a summary: today's market released two major signals.
First, the average share price index is similar in nature to the gap-up medium bullish candles on April 8 and August 4, after both of which the market saw a rebound rally.
Second, ChiNext ETF E Fund's current trend closely resembles its movement from late April to early May 2022, after which a two-month rebound was launched.
Tomorrow, focus on whether the Shanghai Composite can break above its October 27 high; if it does, that confirms the continuation of the rebound.
Market rotation continues.
For AI hardware, watch whether core large-cap names can perform strongly; for AI applications, watch whether front-row stocks, leaders, and core names close with medium-to-large bearish candles.
If AI hardware fails to perform going forward, it indicates the market is still engaged in sector rotation.
In terms of sectors, pay attention to media (represented by AI short drama and comic dramas, and AI film and television), physical AI and robotics, and edge AI; for AI hardware, use the movements of core large-cap names as a reference, favor buying on dips, and avoid chasing highs.
(Zhang Daoda)
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