[Red Envelope] Gentle distribution issues are not a big deal! Tomorrow is the important milestone for AI videos!

When the glass fiber hit the daily limit, I counted my heartbeat seven times. AI videos shattered into fragments, each reflecting the overnight divergences. Today’s market has no absolute strength or weakness; rather, under the background of declining volume, a gentle differentiation is taking place. [Taogu Ba]

------------Old Cat Recites Poetry

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2026-02-11 Review

1. Market Review

Influenced by a slight correction in U.S. stocks, A-shares opened slightly lower today, then maintained narrow fluctuations. The trading volume further shrank, and by the end of the morning session, the expected daily volume had already approached the 2 trillion mark. With liquidity still tight, technology sectors that rely heavily on liquidity continued to perform weakly. But the index performed relatively well, consolidating with slight fluctuations, stabilizing. The performance of individual stocks was evenly split between gains and losses, and in the context of shrinking volume, the overall market showed healthy differentiation. In terms of sectors, aside from glass fiber optics leading the top ten in the morning, other hot spots were very scattered with frequent rotation. AI video sector showed clear divergence, but funds did not shift to other competing sectors, maintaining expectations within a healthy divergence range. Other sectors rotating during the day included commercial aerospace, which also performed generally. Short-term sentiment showed increased divergence at high levels, with some impact at low levels, but within controllable limits. Funds continued to focus on core tiers two and three for betting. In the afternoon, the market continued to weaken with increased divergence and faster rotation. Market sentiment was cautious, with little to excite.

The total trading volume across both markets was 198.43 billion yuan, down 12.13 billion from the previous trading day, a decrease of 5.76%. There were 1,977 stocks rising and 3,030 stocks falling, indicating a generally weak and oscillating market.

2. Market Analysis

Due to the increasingly obvious pre-holiday effect, the market continued to shrink in volume, and overall volatility decreased. Coupled with the index being at a position with both resistance above and support below, with volume shrinking, there was little room for upward or downward movement. Therefore, the past two days have maintained a slight oscillation, consistent with our previous projections. The index has been moving around the boundary of zones ① and ②, and the overall structure remains unchanged, maintaining our original expectations. In the current environment lacking volume expansion expectations, tomorrow is expected to continue with a sideways trend. The Shenzhen Component Index faces minor resistance around 14,292 and minor support around 14,100 (the upper boundary of the early version of zone ②). The Shanghai Composite faces minor resistance around 4,156 and support around 4,089. Overall, although there isn’t much room for upward movement, the index still retains a good safety margin. As long as there is no systemic risk, the strategy remains focused on sentiment rather than index levels. With no clear volume expansion expected, the focus remains on sentiment-based betting rather than trend-based betting.

Tomorrow is the last day before the holiday for fund withdrawals, meaning that the ongoing shrinking volume pattern will likely conclude soon. Afterwards, funds may start to bet on post-holiday inflows, and some volume recovery expectations could gradually emerge.

3. Sentiment Analysis

Since yesterday, some high-flying stocks have shown signs of divergence. For example, Hangzhou Electric and Julli Rigging were temporarily hit with limit-down, and Western Materials closed near the limit-down. These are early signs of high-level sentiment divergence. Today, this situation intensified: Hengdian Film and Television was directly limit-down after regulatory intervention, and Fenglong Shares also hit the limit-down. Unlike yesterday, today there was no large intra-day recovery, indicating that high-level divergence has significantly increased. Yesterday, we also analyzed that the market tends to open up high valuations from low levels, as high valuations are less cost-effective. Although today’s divergence exceeded expectations, it remains within a reasonable range, with no signals to reverse the overall sentiment trend. However, it is likely to influence tomorrow’s continuation of divergence. If conditions are good, this divergence may be concentrated during the opening auction. If conditions are less favorable, divergence may continue at the open, with intra-day recovery attempts. During this process, stocks like Read Technology and Dawei Technology are showing signs of opening and turnover. If related themes can withstand the turnover and selling pressure, then observing the subsequent inflow and recovery strength will be important. If the recovery is strong, leading stocks that drive sentiment repair will enjoy high premiums and continued upward potential. Tomorrow’s 3-to-4 tier battle will focus on which stocks can first withstand divergence and actively strengthen.

On the 20cm side, since most strong momentum stocks hit the limit-up yesterday, if sentiment confirms a turning point tomorrow, some stocks are expected to stand out. These can be selectively watched. The top stocks that led the rise will also continue to have trading opportunities. Be cautious of regulatory risks—avoid stocks with limited regulatory space and steer clear of speculative moves based on abnormal fluctuations.

4. Sector Discussion

1. Glass Fiber Optics

Praise me!

We have been emphasizing the left-side trading opportunity in glass fiber optics early on, predicting that the sector will likely reach new highs, which will then create right-side trading opportunities. After hitting a new high yesterday, the sector gapped up today with a strong rally, marking the first time the entire sector experienced a surge limit-up, no longer limited to the three core stocks. Since the initial signal, the three core stocks have gained between 25% and 35%. During the recent low-volume oscillation, this sector outperformed most others. Based on the sector index gains, it is the strongest overall. After today’s collective climax, tomorrow is expected to be a feast for holders. No new buy points are available from either the left or right side. In the next day or two, it will be a phase of weak chips leaving strong ones, so stocks that continue to strengthen can be held, while those that weaken or show signs of exhaustion should gradually exit. Off-market funds are mainly watching; those who haven’t participated in the past week should avoid chasing high to prevent getting caught on either side.

2. AI Video

We mentioned yesterday that AI video will continue to perform, but the strength will not be reflected in the sector index, rather in the competition among leading stocks with high recognition. Today’s performance shows that, although overall sector divergence exceeded expectations, the competition among the 10cm leaders, 20cm core stocks, and capacity core stocks continues, with some relatively strong stocks emerging.

As one of the few sectors with sustained thematic performance recently, today’s AI video divergence was stronger than expected. This is partly due to profit-taking in some stocks and the conflicting rhythm of AI marketing and AI Spring Festival Gala. However, such divergence is not necessarily negative; divergence is inevitable, and the recent intensity is within a reasonable range. Importantly, during the divergence, funds did not flow into the previously competitive directions, increasing the likelihood of funds returning to the sector for recovery after the divergence plays out. Tomorrow’s key focus will be the 3-to-4 battle, especially the competition among Read Technology, Dawei Technology, and Huanrui. Whether Read and Dawei can complete turnover and whether the divergence remains healthy are critical points. The support for a direct open-board from Read and Dawei indicates that if this happens, we should watch whether they can quickly turn over and strengthen after opening, or whether Huanrui can weaken and then strengthen to take the lead. If Read continues to open with a flat line, the divergence will be prolonged, as intra-day open-board turnover cannot be achieved. In that case, the sector’s recovery rhythm will be delayed, and we will monitor it during the day. Overall, the future rhythm favors continued divergence, followed by attempts at repair. The key is whether the repair is strong enough to sustain the divergence.

The battle for the 3-to-4 tier is itself a key point, which can only be confirmed on the right side. The capacity core stocks can temporarily be considered as Guangxian; their trading is more suitable for the left side. Other popular stocks’ rebounds and first-board re-runs can also be arbitraged once the rhythm point is reached.

3. Big Tech

Big tech performed weakly today, affected by U.S. stocks and the current low trading volume, which does not support sustained growth. Big tech relies heavily on liquidity, and in the current market environment, it is at a disadvantage. The recent two or three days of correction are healthy; if volume recovers after the holiday, big tech remains promising. For swing or medium-long-term investors, it’s worth continuing to watch. For short-term traders, the current explosive potential is limited, so focus on sentiment-driven thematic bets.

4. Commercial Aerospace

Yesterday’s strongest AI video sector showed more-than-expected divergence in the morning, with some fund outflows. For the commercial aerospace sector, which had clear competition yesterday, this is a good opportunity for fund inflow. Plus, today’s satellite launch provided a news catalyst. Overall, today’s market conditions have created favorable conditions for the sector’s rebound. However, despite multiple attempts by Julli Rigging to lead a rally, the effect was not ideal. This repeated pattern indicates a lack of strength. Without further major positive news, the probability of a strong rally tomorrow is reduced. The current rhythm requires waiting for funds to withdraw from AI video before a better rebound can occur. We have been reminding everyone of the last exit points today, hoping it helps brothers.

5. Computing Power

Computing power continued to rally today, albeit with limited strength, and was relatively active among intra-day hot sectors. We previously mentioned that the hype would be narrower than AI video, focusing on shrinking speculation, mainly on authentic projects with real computing power collaborations. Tomorrow, Dawei Technology may open at the limit, with intra-day divergence possible. Overall, the rhythm is expected to stay aligned with AI video, with a focus on leading stocks rather than low-level rebounds. Keep an eye on the intra-day divergence and subsequent recovery after divergence plays out.

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