[Red Envelope] 2026.2.11 Review: Major disagreements in AI applications, the ancestral wisdom of not passing the baton on the day after the climax continues to shine.

Just a quick like, and the gains keep coming; ask questions and enjoy long-term benefits! Hello everyone, I am Wan Gu Zhang Qing. [Taogu Ba]
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1. Morning Thoughts

First, a quick morning reflection: I made it very clear that on the day after a climax, you shouldn’t chase the rally, especially after two consecutive days of highs. Today is definitely not the day to chase the laggards; it’s a divergence day, and chasing the back end will only lead to big losses. Today, the AI application that opened at auction, Zhengyue Technology, met expectations. Others did not meet expectations and couldn’t strengthen or rise strongly. From the market environment, it’s clear that recent volume has been shrinking, making it impossible for a theme to sustain a continuous rally. I also mentioned GCL System Integration, noting that it is opposed to AI in nature. They have a strong-weak relationship, so when AI applications diverge early in the session, it pushes the price high. But after the auction, I said that although GCL managed to rally later, it initially hit the limit down, which is suspicious. If funds really wanted to buy this stock, they wouldn’t let it open at the limit down. It’s obvious that the AI application’s overnight orders scared it, and once the front runners of AI applications withdrew their orders, realizing it was a paper tiger, funds judged the divergence and bought it back. But this kind of opportunistic behavior is not worth watching. If it’s truly strong, don’t play tricks—if AI applications are strong, just go all in; any messy attributes are a sign of poor prospects. That’s why I advised everyone to sell only and not buy, and if buying, buy some later in the session to prevent high-flying traps. But it turned out to be a trap today, with many chasing in. Now GCL is just a messy stock, relying on Yabo, which has diverged and continued to outperform expectations. GCL’s own prospects are minimal; today’s surge and fall trapped many. If tomorrow’s auction can’t open red and give everyone a decent exit, the opportunity will be lost.

2. Auction Analysis

Today’s auction for Zhengyue Technology was quite shocking. Many people thought it exceeded expectations, but guiding by AI applications isn’t surprising. The order book should be viewed in context of the previous day’s fermentation. Given the high level of AI application hype yesterday, today’s 6 billion yuan in sealed orders for Zhengyue Technology is just in line with expectations. Besides Zhengyue, other AI applications, whether in terms of number of limit-up stocks or order sizes, fell short of expectations. Overall, the auction indicates divergence, so there was no clear guidance for AI applications today. I didn’t mention this in the morning either. The only clear auction guidance today came from Dawi Technology, which showed some order accumulation, indicating some capital flow into the sector. But the core stocks in the sector are large-cap stocks, and with current market volume, it’s not supporting any big moves. That’s why I didn’t mention this guidance today. On divergence days, don’t open positions recklessly. I didn’t suggest any opportunities today. Whether the market is good or whether funds are active, you can see from the two formulas I provided for refreshing target stocks—today, no first-board stocks were refreshed, only two second-board stocks. Yesterday, ten stocks were refreshed across ten formulas. This shows that today, there’s little capital playing around; during the auction phase, there was little layout, leading to so few refreshed stocks. A reminder: if the total stocks refreshed by the two formulas later are fewer than five, it’s not recommended to open positions that day. If you do, keep positions small, because it indicates no funds are laying out, and no one will take the profit later. Even if the market rises during the session, it’s unrelated to the auction, and it’s not worth gambling on such probabilities.

3. Continuous Limit-up Tiers

Four-board stocks:
Baichuan Shares, which can be very surprising, is a top chemical leader. Today, it shifted from divergence to convergence, leading the sector to rebound. If you want to switch to another theme, that’s the main line now. I didn’t look at it earlier because it was weak and small in volume, so I didn’t chase it. Now, there’s little room for movement after the abnormal rise, and recent stocks that moved into abnormality have not performed well afterward.

Three-board stocks:
Yabo Shares, the hope of the photovoltaic sector. GCL System Integration is unreliable now, but this stock’s momentum isn’t very strong—less than GCL in terms of volume. GCL probably has to look at Yabo’s performance now, since GCL itself has been disappointing.
Jihua Group, a back-end chemical stock, with no expectations, just watching Baichuan’s performance.
Zhangyue Technology, sector divergence led to volume increase, and a turnover day is expected tomorrow, which is also the target.
Huanrui Century, AI application stock second only to Zhangyue, will inevitably see inflow tomorrow, but still depends on Zhangyue’s performance.
Longyun Shares, a micro-cap AI application stock, showed strength today. It’s likely a sector chain stock. Only highly controlled sector chain stocks can remain unmoved during such large divergence.
Decai Shares, a back-end AI application stock, weaker than Huanrui, not even worthy of being compared to Zhangyue.
Dawi Technology, in the power calculation sector, exceeded expectations continuously, trying to drive sector fermentation. There was some fermentation, but not enough to cause a big wave. It seems to be a stock driven by the network hosting sector. In today’s market environment, small-cap stocks can’t even get enough funds for a limit-up, let alone large-cap stocks.

4. Market Summary

Today was within expectations for divergence day, with a big divergence in AI applications. The back-end stocks were basically wiped out— even Huanrui, with billions in sealed orders, was dragged down. It might be related to the approaching cash-out day, as everyone is busy cashing out for the New Year. The market continued to shrink in volume, almost losing two trillion yuan. Only two trading days remain before the holiday, and it’s too late to ferment new themes. Other themes lack big expectations. You can’t just chase chemical stocks, and betting on chemical news before the holiday? That’s too far-fetched. A reminder: chemical stocks peaked today, so don’t chase blindly tomorrow. Think about what happened to AI applications today before jumping in. I believe funds will still flow back into AI applications, as there’s really nothing else to do. Space photovoltaics don’t look promising, chemical capacity is small with no expectations. Right now, besides AI applications, there’s no other choice—if you don’t want to play, you still have to.

5. Optimal Auction Strategy

Today, there was no clear optimal auction strategy because there were no guiding signals. Instead of blindly buying People’s Daily, reflect carefully. I explicitly said earlier not to chase the back-end stocks of AI applications, and I repeatedly reminded everyone. Since the formulas didn’t update, I won’t post them. For those interested in my trading system, check out the four posts below; they are highly valuable and very detailed. I strongly recommend you read them.
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[Red Envelope] Practical Post Nine, Trend Stocks Trading System (Ultimate Version)

[Red Envelope] Practical Post Ten, Software Trading System, Little Known

[Red Envelope] Practical Post Eleven, Collective Auction Trading System (Updated)

6. Daily Reflection

I will keep saying this so everyone understands my intentions!
Regarding this trading system, I want to share a few words: this system is a gift I’ve painstakingly created for everyone. It’s not a perfect treasure, nor is it flawless, but it’s still worth cherishing. What is it, and why is it worth cherishing? I see it as a platform—like Taogu Ba, it’s a bridge for communication. Through this system, those who trust me can test it in real trading, encounter problems, and give feedback. I’ll then find ways to solve those issues. In this process of communication and exchange, we can bring ourselves closer. This system can also be continuously improved. It may not be at a high level now, but I believe that with everyone’s joint effort, it will eventually help us ride the waves in the stock market. There’s a saying in the market: retail investors are the main force, but because of lack of unity, they can’t break out. My ideal is to unite everyone through this system. If we can reach a consensus and everyone recognizes it, we can become a powerful force in this market. This consensus isn’t based on seat premiums or hype, but on the trading system we build together. I think this is the best way to forge consensus. When we succeed, we will be the most beautiful scenery in the market. I created this system, but ultimately, it will be perfected by you. Here, I sincerely ask everyone: if you agree with this system, please don’t give up easily. Participate actively. I believe the future market will have a place for us. In the Ming Dynasty, Hu Zongxian wrote a poem for Hai Rui and himself to clarify his resolve. Inspired by his wisdom, I also found a poem to clarify my own resolve.

“Gift to Fellow Investor—System’s Heart and Will”

I forge my sword with sincere devotion,
Open source, hoping friends will meet again.
Not seeking perfection to shock the world,
But building bridges to cross the wild geese.
Practical testing reveals true knowledge,
Feedback refines the jade and the mirror.
Unity gathers strength like a thousand pounds,
Consensus shines a single bright point.
Not envy fame or hollow premiums,
But wish for collective effort to build a strong city.
Today we walk the thorny path together,
Tomorrow we look upon clear skies from afar.

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