Group 1 - The strongest branch of computing power has formed a VCP structure with optical connections and PCBs, and optical connections have made breakthroughs [1] - If the market index continues to rise, the leading sectors will likely be computing power equipment followed by power equipment, with power equipment experiencing a later and less sufficient pullback [3] - The average stock price index has recently confirmed a situation where the lower limit of the pullback space has been identified, but it is uncertain if the adjustment structure has ended, with the possibility of the box continuing to expand to the right [5] Group 2 - The trading volume has recently broken through the 21-day average volume, initially satisfying the conditions for a momentum reversal, but the price box may not break through immediately [5] - The reliance on small-cap junk stocks for market rallies is unlikely, and attention should be on hard technology, innovative pharmaceuticals, as well as the support levels of insurance and banking sectors [5] - The performance of brokerage firms has been weak, indicating that they may struggle to achieve significant results, despite being favored by retail investors, as institutions show little interest [5]

- The liquidity factor has shown a rapid rebound, with active trading by major funds. This week's recommended sectors for the liquidity factor include electronics, electrical equipment and new energy, pharmaceuticals, machinery, non-bank finance, and non-ferrous metals[14][16] - The long-term prosperity expectation factor, which serves as a proxy for prosperity investment, has started to show a slight upward trend in effectiveness. This week's long-term prosperity expectation factor includes non-bank finance, building materials, transportation, electric power and public utilities, and non-ferrous metals[18][20] - The short-term prosperity expectation factor continues to focus on domestic demand, with significant upward movement in long-short excess returns. This week's short-term prosperity expectation factor includes agriculture, forestry, animal husbandry, and fishery, consumer services, non-bank finance, machinery, and non-ferrous metals[22][24] - The momentum reversal factor is currently unable to describe the market trend, but it is expected that sector rotation may shift to momentum in one to two weeks. This week's momentum reversal factor includes automobiles, communications, electrical equipment and new energy, machinery, and home appliances[25][26] - The composite factor for this week includes consumer services, non-bank finance, machinery, electrical equipment and new energy, electronics, and non-ferrous metals[32][33] Factor Backtesting Results - Liquidity factor, excess return of long positions: 0.7% to 2.3% over various periods[16] - Long-term prosperity expectation factor, excess return of long positions: 0.6% to 2.4% over various periods[20] - Short-term prosperity expectation factor, excess return of long positions: 0.6% to 2.0% over various periods[24] - Momentum reversal factor, excess return of long positions: 0.4% to 2.4% over various periods[26]