From the actual legend, it can be seen that a stock that will rise sharply must have sufficient bottom momentum to push the stock price higher. The term 'sufficient huge quantity' here refers to a relatively small amount compared to the past, that is to say, when a stock's trading volume extremely shrinks, a continuous large quantity can appear to push the stock price higher Trading volume is a tool for measuring buying and selling gas, and it can confirm the direction of stock prices Therefore, savvy investors must track stocks with huge trading volumes at the bottom, because when the supply and demand relationship of a stock undergoes significant changes, it will determine the direction of the stock price. Investors must not ignore the relationship between stock price and volume when such changes occur. Once the price and volume match, the stock price will inevitably rise rapidly as expected after intervention
The change in trading volume pattern will be a precursor to a trend reversal At the beginning of a stock's rise, the relationship between trading volume and stock price is that the price increases slightly, while trading volume continues to increase, and the stock price also rises with the increase of trading volume Once entering a strong main uptrend, there may be a situation of unlimited surge At the end of the upward trend, there is a divergence between increasing volume and decreasing price, and decreasing volume and increasing price. Once the stock price falls below the ten day moving average, it indicates that the strength has changed and will enter the mid-term consolidation stage
Therefore, when you hold a strong stock, it is best to closely monitor the daily K-line chart of the stock price. If the daily K-line remains above the ten day moving average, you can hold it all the way. Once the stock price falls below the ten day moving average with a long chart or trend, you should immediately sell it and consider a stock swap operation
Special attention should be paid to stocks that have completed consolidation, as the opportunities outweigh the risks The final trading volume of consolidation is shrinking Represents the exhaustion of selling power Basically, volume contraction is a reversal signal, and only with volume contraction can there be a possibility of stopping the decline. In a downward trend, trading volume must gradually decrease in order to have a chance of rebound But after shrinking, it may shrink again. When is the bottom? The bottom can only be confirmed on the day when the volume decreases and then increases again If the stock price is already above the ten day moving average at this point, it is more certain that its upward trend has begun
So, basically, the perspective we should pay attention to is the increase in volume after volume contraction. Only the increase in volume can reflect the change in supply and demand, and only the increase in trading volume can give the stock a bottom momentum to rise
At the end of the trading session, the stock price trend exhibits the following characteristics:
1: The fluctuation amplitude gradually decreases
2: Shrink the quantity to the extreme
3: After the volume contraction, there was a volume increase, and suddenly one day there was a significant increase in volume, and the stock broke through the middle bullish line, breaking through the stock market and standing above the 10 day moving average
4: The trading volume continues to increase, and the principle is to close at a bullish line and leave the bottom price for three days
5: After the breakthrough, the moving average began to shift towards a bullish pattern, while during the consolidation period, the moving averages were stacked together
