1. The deeper the stage decline, the more powerful it is, and the lower the absolute stock price, the more advantageous it is
The main approach to seeking opportunities in low-priced oversold stocks follows the strategy of price game theory. Stocks with a greater decline than the overall market during the same period, as well as those with significant comparative advantages in the stock price within the entire market and among similar stocks, are the focus of tracking.
Technical characteristics of individual stocks:
A、 The annual decline of oversold stocks is usually over 30%, and it would be even better if they could drop by 50%; It is best to choose stocks that have fallen for no reason and are experiencing an unlimited bearish trend.
B、 There is no resistance platform formed (i.e. long-term oscillation at historical lows, recently falling below a new low to form a relatively recent rebound lock up zone), and there has been no rebound market in the past few trading days or on any trading day.
2. Stocks with active stock characteristics are the easiest targets for financial attacks
Experienced investors in the secondary market should be familiar with this market phenomenon: every time a certain degree of oversold rebound is initiated, the active stocks are often the first to receive attention from funds, starting earlier than other stocks and rebounding higher than other stocks.
3. Technically resistant and volume reducing low-priced stocks are the prelude to the launch
Against the backdrop of a sharp decline in the overall market, if some low-priced oversold stocks can withstand the test, it proves that the bottom of these stocks is very solid and belongs to ideal potential varieties.
Technically speaking, trading volume is crucial for assessing the potential of low-priced oversold stocks. It is best for individual stocks to experience a high degree of volume contraction during their decline, which belongs to the category of volume contraction and short selling. Once funds attack, it can easily lead to a V-shaped reversal.
