Zotye Auto has achieved limit-up status for two consecutive days, marking a three-day winning streak as of today. The closing price today stands at 2.02 yuan, accompanied by a robust buy order of 570,000 shares.

There's no need to delve into the fundamentals here; many of my followers are seasoned veterans in the auto industry, possessing a profound understanding of both the sector and Zotye Auto's underlying fundamentals. Their predictions are often spot-on, and their views on fundamentals tend to align.

Of course, I won't jump to conclusions. Let me just say this: Even if the pioneer of 'speculative' tactics were to make a comeback, what difference would it make? Moreover, such speculative approaches have now become somewhat of an industry norm.

From a technical standpoint, Zotye Auto's stock price has plummeted from a high of 18 yuan in 2016 to just above 1 yuan, experiencing an unintentional decline over the past decade. During these ten years, the auto market has witnessed numerous cycles of ups and downs, with automakers rising and falling multiple times.

There's no need to look too far back technically. Focusing on the period since last year's peak in the auto sector, when the entire industry began to decline, Zotye Auto's technical indicators on the weekly chart suggest it has already bottomed out, earlier than many 'star' auto stocks that were heavily hyped in the previous two years. For instance, companies like Seres and JAC are still technically in a mid-downtrend.

Just as technical indicators were hinting at a bottom, new developments emerged regarding Zotye Auto, although the underlying operations remain shrouded in mystery. As someone who has followed the auto industry for 20 years, possesses a deep understanding of market and corporate fundamentals, and has extensively studied stock technicals and market dynamics, I naturally harbor significant doubts.

I can perceive the situation but will refrain from elaborating further. Let's leave it at that. If any fans are involved in stock trading, especially those who have invested in auto stocks, feel free to reach out privately for further discussion.

By the way, this account will now focus on analyzing auto stocks and the technicals of the auto sector, aiming to provide technical support to the vast base of auto investors. The goal is to prevent them from squandering their hard-earned money from R&D, product launches, project planning, content creation, and video production in the stock market without understanding the underlying reasons.

The auto market is fiercely competitive, with rivals showing no mercy. However, the capital market is ten times more brutal. Millions or even billions can vanish as swiftly as a few thousand. Moreover, most people don't comprehend how they got ensnared or why they incurred losses.

Let's refocus. The burning question on everyone's mind: Is Zotye Auto's sudden surge a harbinger of things to come? After a year of decline, is the auto sector poised for a comeback? From a technical perspective, it's unlikely to happen so swiftly.

I won't delve into individual stocks in detail, but I can analyze the technicals of the auto sector. Since its peak last year, the entire auto sector has seen minimal rebound. Last month, there was a slight pullback, but the momentum was extremely feeble, far weaker than the broader market and other robust sectors.

Technical analysis emphasizes momentum. The weak rebound suggests it's unlikely to be a V-shaped recovery but rather the formation of a new trading range. After consolidating within this range, the sector will then determine whether to break upward or downward.

The aforementioned K-line chart doesn't clearly depict momentum strength, but a larger-scale chart makes it evident. The downward momentum hasn't fully dissipated; in fact, the second phase is still accelerating downward without entering a deceleration phase. Thus, it's likely to reach new lows, at least below 5295.

Of course, there's another scenario: If the broader market experiences a significant rally soon, the auto index may consolidate sideways for an extended period. However, note that it will only consolidate, not surge upward directly. The specific trend would involve trading time for space, consuming downward momentum before gradually following the broader market's ascent.

The duration of this process remains uncertain.

From a technical perspective, the trend lines, adjusted for containment relationships, show gradually rising lows without new lows, which is equivalent to trading time for space. Only technical analysts will truly grasp this concept.

Earlier, I discussed Zotye Auto and then analyzed the sector index, not merely to fill space. The rationale is that individual stocks within a sector rarely move independently of the sector. In other words, when the industry is thriving, most companies reap the benefits; when the industry struggles, even strong companies face challenges. The exception, of course, is 'problematic stocks.'

I won't discuss expectations for Zotye Auto further. For those holding other auto stocks, if the individual stock's technical trend is complex, focus on analyzing the sector index. Over the long term, individual stocks generally don't deviate significantly from sector trends. This is why we often say individual stocks will eventually align (rise or fall) with the sector. (This article is for discussion purposes only and not intended as investment advice.)