Last week of trading before the holiday season begins, marking the final week of market activity prior to the upcoming festival.

I pointed out at the beginning of January that the market would fluctuate between 4,200 and 4,000 points. How long the fluctuation lasts and the timing depend entirely on GJD’s mood. Currently, the market is at 4,065, with only a few dozen points of downward space, and the support strength is extremely strong. After a significant gap-down last Friday, mysterious funds started buying again. [Taogu Ba]

The most notable feature last week was the inexplicable large drop, and the second most bullish sector yesterday was hit by limit-down the next day. This phenomenon is expected to change rapidly next week. The market trend last year changed on the last day, mainly because trading volume was still around 1.5 billion. This year, it is highly likely that funds will enter early after the holiday. Last Friday, about ten themes rotated through the market. Which theme is more likely to become the direction for the Spring Festival fermentation?

1. The AI sector, closely related to daily life and almost annually recurring, seems to have a somewhat shaky logic in application. Later, large models will basically be dominated by big companies, so computing power will become a key focus. Especially after the Qianwen free trial launched, it exploded in a short time. This is just the initial stage of milk tea, and compared to Yuanbao, Qianwen is simply a huge success. AI hardware and computing power sectors have already risen significantly this year, mostly held by institutions. Their short-term explosive potential may not be as strong as last year’s cloud sector, which exploded after the New Year last year and could be a direction to position in advance.

2. Photovoltaics and commercial aerospace sectors. Personally, I think the combination of commercial aerospace and photovoltaics will be a major focus of explosive growth in 2026. The first position is very low, the industry is reversing its difficulties, similar to this year’s storage sector, which also saw a breakout after hitting rock bottom. Additionally, commercial aerospace will definitely have a second wave, but the specific form of this wave will depend on market trends.
   I believe these directions may explode during the Spring Festival. Returning to the market, last week there were no clear sectors, except for a slight continuation in the price-increase theme, represented by Longfei Optical Fiber and Baichuan in chemicals. If next week there is no clear mainline trend and the market continues to rotate rapidly, these sectors are likely to continue their rotation.