Brokerage Morning Meeting Highlights | Signs of a Bottom in Technology Stock Trading Are Emerging, with Congestion as the Core Anchor Point of the Market

Last Friday, all three major stock indices opened higher, with the Shenzhen Component Index and ChiNext Index performing particularly well, rising by over 3% and 5% respectively. In the afternoon, technology stocks fluctuated and retreated, while sectors such as banking, insurance, and electricity showed recovery. The Shanghai Composite Index maintained a narrow range of fluctuations, while the Shenzhen Component Index and ChiNext Index trended downwards. By the close of trading, the Shanghai Composite Index rose by 0.72%, the Shenzhen Component Index increased by 2.21%, and the ChiNext Index climbed by 3.06%. As July came to a close, the Double Innovation Index fell by over 20% on average, while the Shenzhen Component Index and CSI 500 saw cumulative declines of more than 15%, with the Shanghai 50 Index experiencing a relatively small drop. In terms of sectors, dividend stocks were actively trading against the trend, the pharmaceutical sector saw fluctuations and gains, while technology stocks collectively adjusted in July, with the semiconductor industry chain and memory chip concepts experiencing significant declines. Huatai believes that the trading bottom for the technology market is starting to appear; KOrient Securities points out that congestion is a core anchor point for the subsequent market rhythm; Guolian Minsheng suggests that the commercialization of AI applications is about to commence. Huatai: Trading Bottom for Technology Market is Starting to Appear Currently, we are closer to the "initial appearance of a trading bottom," supported by the following judgments: 1) the adjustment space is largely sufficient, with the main line's retracement reaching a typical oversold area in high elasticity directions; 2) domestic and foreign leveraged trading capital has completed a certain degree of clearance, with leveraged funds having retracted all incremental amounts from the second quarter, and leveraged capital in U.S. hedge funds and Korean stocks has also shrunk from extreme positions; 3) however, the market's recent selling pressure remains relatively strong, and there has not yet been a major influx of new capital. The key window for a trend rebound will be in late August; during this period, the mid-year reports, Nvidia's earnings report, and redemption pressure during the rebound process will collectively determine whether technology can usher in a new round of significant rises. In terms of allocation, dividends will continue to form the core holdings, while technology rebounds will prioritize stocks with high earnings certainty, such as semiconductor equipment, and non-mainstream stocks will focus on directions showing improvement in mid-year reports, such as brokerages and innovative pharmaceuticals. KOrient Securities: Congestion is the Core Anchor Point for Subsequent Market Rhythm The primary variable to observe in the next phase is whether trading congestion can genuinely retreat to a reasonable range. In the short term, if congestion decreases, rebalancing should continue to be prioritized, with the market seeking directions that have limited prior gains, low institutional holdings, and solid earnings support. The rebalancing market will focus on three categories of opportunities: (1) recovery directions following extreme congestion, with attention on micro-cap stocks. Historically, there have been 12 significant adjustments in micro-cap stocks from 2010 to the present, and after deep adjustments, the likelihood of a rebound for micro-cap stocks is high and their amplitudes are large; (2) configuration repair driven by returning styles, focusing on stable and financial directions such as banking, utilities, and electricity; (3) low-position industries that have already shown signs of profit improvement, focusing on resource products represented by non-ferrous metals and coal, as well as basic chemicals, agriculture, livestock, pharmaceuticals, non-banking financials, and certain consumer sectors. However, whether this type of market can evolve from a rebound into a trend still requires confirmation from subsequent earnings reports and high-frequency data. Guolian Minsheng: The Commercialization of AI Applications is About to Begin The core investment strategy in AI may shift its focus towards application directions. Accelerating the development of AI applications is key to ensuring that current capital expenditures in AI can achieve sufficient positive returns in the industry, and it will become the focal point for the entire industry. The leap in open-source model capabilities has greatly facilitated the development of AI applications, with the Kimi K3 License model activating commercial potential for open-source models. At the same time, ByteDance's Doubao, Tencent's WorkBuddy, and Alibabas Qianwen are quickly accumulating traffic and user habits, signaling that the commercialization of AI applications is about to begin. This article is reprinted from "Cailian Press," edited by Jiang Yuanhua.