Starting with a fully invested A-share portfolio to become a capital...

Chapter 81 Wave Washout Method

As a second-tier speculative investor, Liao Guopei never intended to directly confront Xu Xiang, the mastermind behind the Ningbo Daredevil Team.

But having come this far, he no longer hesitated and directly transferred 2000 million yuan from his bank account to his securities account, raising the available funds in his main securities account to 3100 million yuan. He then began to give signals of price increases.

[Stock Anomaly Alert]: A super buy order of 100 million appeared for Jianfeng Group.

In 2009, buy and sell orders exceeding 100 million were considered super orders, and investors who added them to their watchlists could see the notification on the abnormal trading page.

The order for 100 million yuan was just caught at the threshold for abnormal fund movements.

At this moment, the other speculative investors in Jianfeng Group understood the situation perfectly. Some cancelled their orders, while others took orders, collectively pushing the stock price up.

It's worth mentioning that they all tacitly controlled the amount of their purchases, splitting it into smaller amounts of tens of thousands of yuan each.

This is because the safest way to manipulate a stock is to raise it in stages. A series of weak rebounds will make many retail investors think about doing day trading to reduce their holding costs.

As the signal gun fired, the Jianfeng Group reversed its "weaving" trend, with the bid and ask prices changing rapidly.

Buy 1: 4.86.

Selling price 1: 4.87.

Buy 1: 4.92.

Selling price 1: 4.93.

The latest price is 4.92 yuan, still down 7.7%. At this point, all the speculative funds in Jianfeng Group know that the first wave of price increase was just to lure retail investors into doing reverse T.

What is a reverse T?

Simply put, if the stock price rises and you think it has peaked in the short term, you decisively sell your shares. If the stock price falls as you guessed, you buy back the shares you sold, thus completing a reverse T trade.

Reverse trading is against human nature, and very few retail investors can fully master it.

After the rebound peak, the speculative funds in the Jianfeng Group gradually reduced their buy orders, because they were all skilled at manipulating stocks and knew how to scam retail investors.

It's worth noting that the pullback shouldn't be a complete reversal.

For example, if the price drops from the limit down price of 4.8 yuan to the latest transaction price of 4.92 yuan, and assuming that 4.92 yuan is the peak of the first wave, the pullback should not exceed 1%, which is 4.86 yuan.

Why can't it exceed 4.86 yuan?
Because once the price exceeds 4.86 yuan, the profit from reverse T will exceed 1%, and some retail investors will gradually buy back in. These retail investors are known in the market as "financial arbitrageurs," who focus on accumulating small profits as much as possible.

By keeping the drawdown within 1% and then pushing up the peak of the second wave, and repeating this process several times, the "financial arbitrageurs" will have basically sold off their chips. This is a common reshuffling tactic used by speculative capital.

No matter how the market changes, the stock market will always be a battleground for institutional investors, speculative funds, national teams, and retail investors. Retail investors are the most numerous and are the key to the profits of the other three.

……

At the end of the morning session, Jianfeng Group was driven up twice by Zhang Yang, Liao Guopei, and other speculative funds, with a turnover rate of 4.7%, which is not actually that high and further consolidation is needed.

In the afternoon session, the third wave of upward movement, spearheaded by Liao Guopei, pushed the price up to 5.27 yuan, just shy of the opening price of 5.33 yuan, forcing out a large number of shares held by retail investors.

The surge was not against the overall market trend. On May 8th, the A-share market showed a strong recovery trend, and northbound capital accelerated its inflow during the afternoon session.

Experienced stock market investors know that northbound capital has long been considered "smart money," and many individual investors, even speculative funds and institutions, use it as a signal for price surges. Huaxin Securities, a leading securities firm, is currently trading at 25.7 yuan, a 3.88% increase. If one had entered the market during the morning's decline, the current gain would be over 4%.

The decline in the four major state-owned banks, often referred to as the "stabilizing force," was due to the H1N1 flu outbreak in the United States and Mexico. The impact of the flu caused investment banks around the world to worry about the economic recovery.

不过自5月1号到3号传递的信号来看，H1N1流感并未对美国经济复苏造成任何威胁。

With the world's largest economy holding up, other countries that need to do business with it can naturally breathe a sigh of relief.

In 2009, the US dollar was the internationally recognized world currency.

Since the world's largest economy has not been affected, and China is a major exporter of products to the United States, the increase in orders is foreseeable. Furthermore, foreign trade involves foreign exchange transactions, which also brings growth expectations to the banking business.

This is why, after the U.S. Department of Commerce announced that personal consumption expenditures grew by 2.2% in the first quarter, the A-share banking sector saw five consecutive days of gains when the market opened on May 4.

With the banking sector stabilizing, the profit-making effect in other sectors is very obvious.

With the profit-making effect obvious, the shakeout and price surge of Jianfeng Group did not attract much attention.

Like Zhang Yang and Liao Guopei, Xu Xiang, Ma Xinqi, Sun Guodong, and others were all methodically trading the wave-like market trends.

But as the time came to 2 p.m., Zhang Yang stopped pretending and used all of his remaining 100 million yuan to buy shares in Jianfeng Group, issuing a notification of abnormal fund movements.

next second.

Liao Guopei and other speculative investors have also stopped acting.

[Stock Anomaly Alert]: A super buy order of 1000 million appeared for Jianfeng Group.

[Stock Anomaly Alert]: A super buy order of 900 million appeared for Jianfeng Group.

[Stock Anomaly Alert]: A super buy order of 760 million appeared for Jianfeng Group.

The sudden surge in large buy orders sent the stock price soaring, with 270,000 lots being bought at 5.86 yuan.

The shareholders who were shaken out of the market were immediately agitated by the soaring stock price and rushed to the stock forum to vent their frustrations.

[Butt Dipped in Wine]: Pu Nie Yi Ge Die, I sold Jianfeng Group in the morning because I saw a rebound, and then I waited for it to come back, but it hit the daily limit up. It was a sudden, explosive surge to the daily limit up. Are you even human, you speculators?

[Yangcheng Quality Youth]: You deadbeat speculators, I'll curse your mother! I've been watching the market all day, my eyes are practically blurry, and I finally want to do a T+0 trade, and you tell me it suddenly hits the daily limit?
[Baseball King]: Why did Jianfeng Group, a company in the cement industry, suddenly hit its daily limit? Can anyone explain this?

[Jianghu Xiaosan]: No, buddy, I think I saw some media saying that Jianfeng Group is actually the leading domestic producer of shikimic acid!
After Jianfeng Group's stock price hit the daily limit, Liao Guopei contacted more than a dozen financial self-media outlets to create hype across the internet, releasing news articles one after another to retail investors.

Shocking! Behind a cement company lies a subsidiary with the most advanced "star anise extraction shikimic acid technology" in China!

Breaking News! Jianfeng Group saw a large influx of buying in the final minutes of trading, surging to its daily limit. Why are cement companies so favored by market funds? Who is driving its stock price?

The World Health Organization recently issued a warning that H1N1 influenza is spreading globally, requiring preventative measures. Shikimic acid, a key raw material for effective influenza treatments, is produced in China by a company with the most mature manufacturing process, not Rhine Biologics or Neptunus Bioengineering, but rather…

The overwhelming publicity and the sudden surge in the stock price of Jianfeng Group caused Ma Xinqi, who was working at a bank securities branch on Jiefang South Road in Ningbo, to be instantly jolted awake. His voice trembled as he exclaimed, "Something's wrong! Someone's really up to something!"

(End of this chapter)