A-share midday review | Epic short squeeze situation! A-shares boiling, ChiNext index up 4.81% in half a day, how to layout TACO trading?

On April 8th, as the tension in the Middle East quickly cooled down, stock markets in the Asia-Pacific region rebounded across the board! A-shares emerged from an "epic short squeeze" with over 5,000 stocks rising in the entire market. By the noon close, the Shanghai Composite Index rose by 1.92%, the Shenzhen Component Index rose by 3.87%, the ChiNext Index rose by 4.81%, and the Sci-tech Innovation 50 Index expanded by over 5%. The total trading volume of the two cities of Shanghai and Shenzhen reached 1.54 trillion, an increase of 470.6 billion from the previous trading day. On the market, AI animated dramas, AI marketing, KNOWLEDGE ATLAS AI, media, DeepSeek and other AI application concepts all surged, with stocks like BlueFocus Intelligent Communications Group, Inly Media Co., Ltd hitting the limit up. Computing power hardware concepts such as optical modules, PCBs, liquid cooling, and optical fibers continued to strengthen, with stocks like Shenzhen Xunjiexing Technology Corp., Suzhou Dongshan Precision Manufacturing hitting the limit up. Gas turbine and transformer concepts rebounded, with stocks like Yantai Jereh Oilfield Services Group and Wedge Industrial hitting the limit up. Space computing power, satellite internet, and commercial aerospace concepts rebounded collectively, with stocks like Anhui Shenjian New Materials and Anhui Yingliu Electromechanical hitting the limit up. Apple concepts and consumer electronics concepts remained active, with stocks like Guangdong Ellington Electronics Technology hitting the limit up. Gold, silver, and non-ferrous metal concepts all strengthened, with stocks like Western Region Gold and Inner Mongolia Xingye Silver&Tin Mining hitting the limit up. Semiconductor, humanoid Siasun Robot&Automation, storage chips, space photovoltaics, quantum technology concepts all rose across the board. In terms of declines, chemical concepts such as methanol, urea, and caustic soda experienced a pullback, with stocks like Shanxi Blue Flame Holding hitting the limit down. Petroleum concepts such as oilfield services, shale gas, combustible ice, and oil and gas pipeline networks all trended lower, with stocks like Zhongman Petroleum And Natural Gas Group Corp., Ltd. hitting the limit down. Pharmacy and pharmaceutical business concepts showed weakness. Looking ahead, Huatai stated that the Middle East situation has eased, and a TACO trading window is expected in the short term. Last Wednesday, A-shares on April 1st could serve as a preview for TACO trading. Focus on two directions: the first group is industries that were oversold earlier. Industries with significant declines in March include TMT, non-ferrous steel building materials, and mechanical equipment. They are the main themes of the spring market cycle and technology, as well as benefiting from the expected rate cut rebound. Mechanical equipment is driven by external demand. The second group is related to low oil prices and independent business cycle, such as AI chain and innovative drugs. Popular sectors: 1. The AI industry chain collectively surged, with the computing power leasing concept strengthening, with stocks like Dawei Technology (Guangdong) Group, Xingyun Technology, Aurora Optoelectronics, Hang Zhou Iron & Steel, Huafu Fashion hitting the limit up. 2. Precious metal concepts remained active, with gold, silver, and non-ferrous metal concepts all strengthening, with stocks like Western Region Gold and Inner Mongolia Xingye Silver&Tin Mining hitting the limit up. 3. Computing power hardware concepts such as optical modules, PCBs, liquid cooling, and optical fibers continued to strengthened, with stocks like Shenzhen Xunjiexing Technology Corp. and Suzhou Dongshan Precision Manufacturing hitting the limit up. 4. The oil and gas sector collectively adjusted, with stocks like Zhongman Petroleum And Natural Gas Group Corp., Ltd. and Shanxi Blue Flame Holding hitting the limit down, while stocks like KLGF, Guanghui Energy, and Tong Petrotech Corp. experienced significant declines. Institutional viewpoints: - Huatai: The Middle East situation has eased, and a TACO trading window is expected in the short term. - Huatai expressed that the short-term market has likely hit bottom as tensions in the Middle East ease. Trump agreed to suspend bombing Iran for two weeks on April 8th, and Iran accepted Pakistan's ceasefire agreement. Huatai suggested that this could open up a TACO trading window in the short term. They recommended focusing on industries that were oversold earlier and industries related to low oil prices and independent business cycles in the short term. They also highlighted the importance of energy security and suggested continuing to pay attention to the power chain. - Huajin Securities: A-shares may have hit bottom in the short term. - Currently, the fundamentals of A-shares may continue to improve, overseas risks have been released, and sentiment has adjusted sufficiently. Thus, A-shares may have hit bottom in the short term. They recommended continuing to buy on dips in industries like communication (AI hardware), electronics (semiconductors, AI hardware), new energy (AI power, energy storage), innovative pharmaceuticals, non-ferrous metals, chemicals, and defense industry (commercial aerospace), as well as undervalued industries like coal, electricity, and banking. - CITIC SEC: Focus on the cloud industry chain and related computing power leasing targets. - CITIC SEC pointed out that with the outbreak of Agent applications and multimodal ecosystems, there is a mismatch between capital expenditures and computing power demand, leading to a new round of accelerated growth in global Token volume. They suggested paying attention to the cloud industry chain and companies related to computing power leasing. This article is reprinted from "Tencent Stock Selection". Editor: Wang Qiujia.