Stock Information Network (http://www.8888.cd/) analyzed that although the stock market performance this year has not been significant, the development between sectors has been imbalanced. The upstream and downstream industry stocks have performed well; the former directly benefits from the government's 4 trillion yuan investment plan, while the latter is guaranteed by steady consumption growth.
The issue lies in the midstream industries. Due to concerns about overcapacity and the difficulty of economic recovery providing effective support, the related stocks have performed weakly. Typical examples include chemical, power, and general machinery manufacturing industries, which have shown relatively lackluster performances during the major market trends in the first half of this year.
However, in recent stages, the stocks in this sector have begun to show abnormal movements to varying degrees, with a typical catch-up trend appearing on the charts.
Why has this situation occurred? A practical situation is that whether in the upstream or downstream sectors, there are still potential individual stocks to be found (the recent rise in the non-ferrous metal stock sector is proof), meaning the market has not yet reached a point where no operable stocks can be selected.
At this moment, the catch-up of these neglected stocks is mainly due to two reasons: First, as investors' expectations for a comprehensive economic recovery increase, they not only favor the upstream and downstream but also dare to be optimistic about the midstream, leading to an improvement in the valuation of midstream industry stocks. Second, after significant increases in both upstream and downstream sector stocks, midstream sector stocks, having experienced stagnation, appear relatively low in absolute stock prices, and some even have certain valuation advantages.
This can attract some investors, especially those who have recently entered the market. In this sense, the current rise in neglected stocks in the market should not be mechanically interpreted as a sign that the market trend is coming to an end, but rather as a result of further deepening and expansion of the market trend. In other words, the catch-up trend in the currently lagging stocks indicates that the stock market's upward movement has entered a new phase, driven by the expectation of a comprehensive economic recovery, marking another round of gains.