Changfei Optical Fiber is approaching a new high, maintaining its strong momentum but showing noticeable divergence at higher levels.

The recent trend has been extremely strong. After the stock price repeatedly rose from a low of 80.350, it surged again. It is now clearly stabilized above multiple short- and medium-term moving averages, and the overall uptrend remains intact. The closing price on the previous day (22nd) at 247.200 was very close to the short-term high of 248.200, while also nearing the upper Bollinger Band at 250.489, indicating that the stock price has entered a high-level strength zone, but also signaling that it's starting to approach significant resistance in the short term.

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Looking at the optical fiber, communication equipment, and related technology hardware sectors, the market performance was mixed on the previous day (22nd). Changfei Optical Fiber surged by 17.16%, breaking away with an independent trend, while $KINGSOFT (03888.HK)$ and $SUNNY OPTICAL (02382.HK)$ others only saw slight increases.

However, the technical risks are highly consistent: despite the sharp rise in stock price, Changfei Optical Fiber’s RSI reached 65 (overbought), with a technical rating of 'Sell' accompanied by a 'Strong Sell' signal, indicating that its short-term gains have significantly overextended, and there is a clear divergence between technical indicators and price. Notably, Sunny Optical is also in an overbought state (RSI 70) with a 'Sell' signal. This suggests that Changfei Optical Fiber's aggressive upward movement occurred in an environment where the sector’s overall technical picture was weak or overbought. Its surge did not receive resonance support from peers’ technical conditions, but rather highlighted extreme overbuying risks driven by concentrated capital. Such divergence usually signals significant short-term pullback pressure.

Judging from the sentiment in the comments, although market sentiment remains predominantly optimistic, divergence at higher levels has rapidly expanded. Some investors continue to expect a breakout, believing that new highs are imminent, while others, having profited significantly earlier on, remain optimistic about the future market. However, there are also increasing voices of caution, with some taking profits, fearing a failure to break through, or even viewing this as an opportunity to short at a double top, indicating that capital has begun to show clear signs of competition at higher levels.

Common questions mainly focus on three areas: first, whether the current price near new highs will break through decisively; second, after such a strong rally, whether it is still worth chasing at this stage; and third, how to view subsequent movements if considering short positions or profit-taking near these high levels. Overall, the market focus has shifted from 'whether the trend is strong' to 'whether the strength can be sustained to complete a breakout,' which also implies that the short-term outlook has entered a more critical phase of judgment.

From a technical analysis perspective, Changfei Optical Fiber's current price is significantly above the middle line of the Bollinger Band at 201.065, indicating a very strong overall structure. The Relative Strength Index (RSI) stands at 74.391, reflecting overheated conditions, showing continued interest from investors but with rising risks for those chasing gains. The most crucial short-term level remains the resistance at 248.200; a decisive breakout above it could open the door for further testing of 250.489 or even higher. However, if it fails to break through, consolidation or profit-taking at these elevated levels will likely increase.

Strategically, 218.640 remains the key dividing line at this stage. As long as it holds, the uptrend can still be considered intact. However, as we approach the breakout zone, the risk-reward ratio is less favorable than earlier stages, so positioning should prioritize confirmation of a breakout rather than blindly chasing higher prices.

Reply to some investors' views:

@Wealthy LifeCurrently, there is indeed capital repeatedly tussling around the breakout level, and the key remains whether 248.200 can be decisively breached.

@公子豹Increased position sizes reflect positive sentiment, but whether the stock price can rise further still depends on whether resistance at higher levels can be overcome.

@金師奶At this stage, market confidence in the trend has clearly improved, but the higher range has not yet been fully broken through.

Based on the above analysis, the strategies for deployment can be divided into the following main approaches:

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Reminder: This article does not constitute any investment advice.

This article is for reference only and does not constitute any investment advice. The market data, opinions, and analysis contained herein may change at any time without prior notice. We are not responsible for any loss or damage caused by reliance on the information in this article. Technical analysis only shows whether certain technical conditions are met; a comprehensive assessment of asset performance should be conducted using additional data. Decisions to trade should not be based solely on this article. Please note that past performance is not indicative of future results.

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