"Old Zhao is right," Liang Jiucheng said, picking up where Zhao Zhiyuan left off. "There is a distinct difference between short-term and long-term trading, as well as the mindset of retail investors, hot money, and institutional major players. We cannot put the cart before the horse, nor can we chase the superficial while losing sight of the fundamental. Sticking to our familiar patterns and familiar domains for trading is the right path."
In Liang Jiucheng's view...
Short-term trading places the utmost importance on chip game theory, trading the price of a stock and profiting from the spread.
Long-term trading, on the other hand, places the utmost importance on fundamental expectation-gap games, trading the business development of a company and profiting from the realization of long-term corporate earnings growth expectations.
Furthermore, regarding long-term versus short-term trading patterns, the three types of market participants—retail investors, hot money, and institutional main forces—also exhibit clear differences.
In short-term trading, retail investors are often eager to chase rising prices and cut losses when falling; they chase highs when sentiment is hot and sell when sentiment ebbs.
Moreover, due to cognitive and information gaps, they tend to buy at consensus and sell at divergence, making it very difficult to profit from market price fluctuations.
In long-term trading, because retail investors' research into corporate operating conditions falls far short of institutional depth, they find it difficult to grasp the trends of corporate operations and industry cycles.
Consequently, they often buy at earnings peaks when profits ought to be realized, and sell at cyclical troughs when corporate conditions are severely deteriorated, making it similarly difficult to profit from long-term investments.
Hot money and institutional main forces, however, operate on fundamentally different tracks and represent two distinct forces of capital within different trading models.
Hot money focuses primarily on short-term trading, engaging in stock price speculation, making money off price volatility, and harvesting retail investors who chase highs, cut losses, buy at consensus, and sell at divergence.
Institutions focus primarily on long-term trading, operating on earnings-driven price increases and the realization of earnings expectations. They earn profits from corporate growth or enterprise dividends.
Of course, in the process, they also heavily harvest retail investors who fail to research corporate operations deeply, stubbornly obsess over P/E and P/B ratios, like to buy at earnings peaks, and flatter themselves as "value investors."
In short, different trading models naturally follow different trading logics.
"That's how it is," Zhao Zhiyuan replied. "Regardless of how far the 'Mega-Infrastructure' main theme can run afterwards, as long as there is still a massive wave of capital chasing it right now, and the sentiment of various funds gathering to speculate is still alive, we can continue to make our move, continue to harvest the capital that chases highs and cuts losses, and continue to extract market profits.
As for after sentiment ebbs... who cares about all that? We aren't institutional main capital, and the scale of the capital in our hands isn't like President Su of 'Huayi Capital', who has tens of billions where both entry and exit are difficult. If things look bad, can't we just cash out our profits and leave?"
"Alright," Zhang Wei thought for a moment and felt he was overthinking things.
"Old Liang..." Zhao Zhiyuan paused, then continued, "Sentiment is relatively consistent in the 'Mega-Infrastructure' main theme today, and going long seems to carry almost no risk. I'm looking at Metallurgical Corporation of China (MCC). Its popularity and sentiment are still there, its market visibility is very high, there are relatively few lurking institutional chips, and after its previous limit-up, its stock vitality has been activated. A lot of the previous locked-in trapped shares have bailed out. Can we play this one?"
"You want to trade MCC?" Liang Jiucheng was slightly surprised.
Although MCC was a core hot stock during the outbreak of this round of the "Mega-Infrastructure" main theme rally, its floating share volume is extremely large, and its market capitalization exceeds 20 billion yuan.
Pushing this to a limit-up not only consumes a massive amount of capital, but it is also very difficult to form a joint consensus among other in-market hot-money players to seal the board together.
Zhao Zhiyuan gave a chuckle and said, "I feel this stock is totally playable. Within the entire 'construction' sector, its visibility is quite high, the order absorption on the tape is healthy, and the capital that entered yesterday and the day before has basically taken profits and exited. Pulling the price up right now won't face much pressure.
Of course, with such a large floating float, I wouldn't dare tackle it alone with just my bit of capital.
So... it depends on whether you and Old Zhang agree with this logic. If you agree, we can join forces and push this stock straight up. If you don't agree, I'll pass on this opportunity."
"I feel... it's indeed playable for a wave," Zhang Wei said, a bright gleam in his eyes as he stared closely at MCC's price action, smiling, "Today, within the entire 'Mega-Infrastructure' main theme, there are quite a few leading stocks hitting the limit-up, and the trend-chasing sentiment among followers is very high. Pushing the price up right now, as long as we ignite sentiment and attract consensus-following capital groups, sealing the board upward won't be difficult.
Moreover, when sentiment is relatively uniform, the pressure on the limit-up board won't be very heavy either.
Another point is looking at MCC's internal chip structure: the heavy zones of trapped shares are all above 4 yuan, which is at least two to three limit-up boards away from the current price level.
Furthermore, after more than half a year of continuous decline, through the process in which the stock's price was halved, a lot of the trapped chips have already transformed into consolidated chips.
Such consolidated chips generally will not become selling pressure on the tape under heavy losses.
Plus, the style preference of market capital allocation has recently shifted noticeably from conceptual thematic stocks toward main-theme heavyweight large-caps.
Under this stylistic shift, if we pull up MCC, we might even attract institutional main capital that is chasing the rally to help us lock in the chips."
"The key is that even a stock like Gemdale could be pulled up, and MCC's market cap and floating float are smaller than Gemdale's," Zhao Zhiyuan noted. "In good sentiment, going heavy on heavyweight big-caps is the only way to make real money. Those small-cap stocks with capital capacities of only tens of millions can't make much even if they catch a limit-up."
"Alright, let's play MCC."
Pushed by their ongoing persuasion, Liang Jiucheng pondered for a brief moment and instantly made a firm decision.
Then, right as his words finished falling...
Zhao Zhiyuan chuckled and began igniting action on MCC's order book.
Utilizing a large sum of capital from his own account through consecutive massive buy orders of 10,000 lots each, he rushed in to buy.
25 million yuan—close to 100,000 lots in market-order purchases—poured into MCC's order book in an instant.
Stimulated by such massive, continuous multi-thousand-lot buy orders,
MCC's stock price on the tape instantly surged in a straight-line upward trajectory, leaping from around a 3.23% gain to near the 6% gain mark.
Immediately afterward, before most people could react, Zhang Wei from the Weihai Rongcheng Chengshan trading seat also directly dumped seven consecutive multi-thousand-lot buy orders onto MCC's order book.
Under the offensive of these continuous massive buy orders, MCC's stock price rocketed once again in a straight line from around 6% to roughly 7.5%.
Moreover, because its stock price exploded by over 4% in a mere half-minute, it rocketed straight to the top of the two exchanges' real-time gainers list.
The moment this ticker appeared at the top of the real-time gainers list, countless short-term active capital groups monitoring real-time gainer shifts across both exchanges, alongside other active main capital groups that had already been eyeing MCC, instantly spotted the stock's abnormal movement and the ongoing massive buy orders.
And right after that...
Trend-following buying capital flocked in from all directions.
"The following buyers is in!"
Seeing MCC—which was being dynamically lifted by ongoing small, medium, and even large orders—receive solid absorption on the tape, Zhao Zhiyuan, who successfully ignited the move, became extremely excited and laughed heartily,
"I knew it, under this kind of market sentiment, it was bound to work."
"Don't rush to hit the limit-up board yet; let's see how strong the absorption is."
Seeing volume expand rapidly on the tape with fierce battle between buyers and sellers—suggesting considerable high-level divergence within the session—Liang Jiucheng quickly issued a reminder.
"Yeah, okay." Zhao Zhiyuan acknowledged.
Instantly, his hand hovered over the keyboard, pausing on key-combos for continuous buy orders, while his eyes stared fixedly at MCC's order book shifts.
Under his intense gaze, on MCC's order book, trend-chasing buy orders continued to multiply.
Naturally, the corresponding selling pressure was also growing.
One minute, two minutes...
As trading time progressed and the buying momentum of trend-chasers began to wane, MCC's stock price started to slowly slide and dip.
"That's about it; the order absorption doesn't have any major issues." Seeing that the popularity and sentiment just sparked by MCC's abnormal movement were fading, Liang Jiucheng said with sharp, focused eyes, "Let's pull it to the limit-up board. We can just churn the turnover on the board."
With that, he didn't even wait for the other two to respond.
His fingers tapped the keyboard, and over 40 million yuan from his account poured directly into MCC's order book.
When this 40 million yuan, consisting of major buy orders totaling over 130,000 lots, flooded into the tape, it instantly catapulted MCC's stock price from around a 7.55% gain straight to the limit-up price.
Immediately following this, before other following capital could jump in quickly, Zhao Zhiyuan and Zhang Wei also used their respective trading accounts to hurl over 50,000 lots of major buy orders at the limit-up price into MCC's order book.
As a combined total of over 100,000 lots in major buy orders hung at the limit-up price in an instant, every single sell order at the limit-up was completely wiped clean.
The very next moment, seeing MCC firmly seal its limit-up board, active market "suicide squad" board-hitting capital groups flocked in as well, joining forces to place orders sealing the board.
In roughly 15 seconds, the volume of orders waiting at MCC's limit-up exceeded 400,000 lots.
However, to ease subsequent board-sealing pressure and allow more capital to churn shares and pick up chips at the limit-up—thereby raising the average chip cost within the market—after a large influx of "suicide squad" trend-chasing board-hitting capital entered, Zhao Zhiyuan, Zhang Wei, and Liang Jiucheng quickly canceled a combined total of nearly 200,000 lots of their leading limit-up buy orders queued at the front.
The moment those nearly 200,000 lots of limit-up major buy orders were pulled, the limit-up sealing volume on MCC's tape plummeted rapidly back below 200,000 lots within a dozen seconds.
Shortly after, those trend-following board-hitting buyers who saw the major capital withdraw also quickly canceled their orders.
Meanwhile, hesitant sellers in the market, seeing that the limit-up might not hold and that intraday divergence was surging fast, hurriedly queued up to sell.
Consequently, with buying power dropping and selling power increasing—roughly one minute after MCC first touched its limit-up board, the limit-up was smashed open, with over 250,000 lots (nearly 60 million yuan) trading hands on the board within that single minute.
Then, the instant MCC's limit-up board was cracked open, Liang Jiucheng, Zhao Zhiyuan, and Zhang Wei simultaneously re-queued over 200,000 lots of major buy orders at the limit-up price, gobbling up all remaining limit-up dump orders in one bite and resealing the limit-up board.
This time, the three of them did not cancel their orders.
And the other "suicide squad" board-hitting capital likewise rushed in to queue up orders once more.
Thus, under the full-force leading seal of the "Qilu Faction", at 10:17 AM, MCC was completely and firmly sealed at its limit-up price.
Within half a minute of being resealed, the limit-up sealing volume reached 1.2 million lots, piling hundreds of millions of yuan into MCC's limit-up bid queues.
Yet, even after MCC successfully sealed its board and the limit-up order volume surpassed 1 million lots, Zhao Zhiyuan—as the initiator of this stock and one of the primary sealing funds—still showed no relaxation in his expression.
His gaze shifted away from MCC and gradually turned toward other core hot stocks in the "construction" sector.
After all, as a core hot stock of a main-theme sector, if hitting the limit-up fails to drive other stocks within the same concept across the sector to rise in tandem, then the quality of this limit-up cannot be considered high.
Moreover, it would be difficult to generate a premium on the following day or attract subsequent follow-up capital to go long.
What he wanted out of trading MCC wasn't merely intraday arbitrage; what he hoped for even more... was to forge a heavyweight core leader for the "construction" sector amid the real estate market cycle, forcing more core major capital in the market to focus its attention onto MCC.
He also hoped to entice more capital into carrying his sedan chair, allowing him to better harvest short-term market profits.
Right under his watchful eye...
Following MCC's powerful straight-line surge to a limit-up seal, the entire "construction" sector index began a rapid upward climb.
At the same time, a massive array of "Hua-prefix infrastructure stocks" like China State Construction Engineering, China Railway Group, China Communications Construction, and China Railway Construction, alongside other small and mid-cap stocks sharing the same concept, were all dragged upward, each experiencing brief, sharp spikes.
In fact, China Railway Construction, right after MCC hit its limit-up, exploded vertically with a gain exceeding 5 percentage points, surging straight to the 7% gain mark, exhibiting strong momentum to emulate MCC's trajectory and challenge the limit-up board.
"Haha, Old Liang, Old Zhang, it worked, it worked..."
Seeing MCC's market-leading influence ignite and observing how various major capitals and active short-term funds continued to flock into the "Mega-Infrastructure" main theme for speculation, Zhao Zhiyuan could no longer contain his excitement, laughing heartily,
"We've successfully driven the momentum for MCC."
(End of Chapter)