There is a saying in the stock market that goes, 'The strong are always strong.'. There are many investors who know this sentence, but few who can study it seriously and dare to practice it. But there are still not many retail investors who are brave enough to chase the rise. If they miss out on those strong stocks that keep rising, they will only sigh. Otherwise, if too many retail investors blindly chase the rise, they will only be trapped in the wrong stocks.

Everyone knows that there are several different colored lines around the candlestick when looking at stocks, which are called moving averages. So, what is the important help of moving averages for us to operate stocks? Let me take you to analyze in detail:

Principles of Stock Selection

1. Choose stocks against the trend, switch to buying stocks, and select stocks from the daily limit up board during the last two days of the market's decline until reaching the 5-day moving average. At this time, the main force intends to manipulate the daily limit up board. Those who want chips or want to take advantage of the limit up to reduce their positions can choose the stocks they want chips for observation.

2. Do not open low and close low on the day after the limit up, do not close low on the day after the limit up, and do not close low on the day after the high opening. Leave the next day to increase volume and continue to close high on the day after the limit up. Be able to maintain a stable position at the limit up price for three days, and adjust the volume evenly without excessive shrinkage. Buy near the 5-day line.

3. Abnormal limit up (price fluctuation): Buy at a low position the next day. Like the bottom twin, fill in the long upper shadow, fill in the high opening shadow, and the long lower shadow rises to the limit (lower shadow gifts, lower shadow is more than 5 points lower than yesterday's closing price, and rises again on the same day)

4. If the trading volume reaches the limit up and stocks are selected, and after reaching the limit up, a sky high volume is released, but the stock price can rise instead of falling in the following days, then the sky high volume on that day is likely that the main force wants to further increase.

Deviation between short-term moving averages and long-term moving averages

In the practice of moving averages, there is often a deviation between short-term and long-term indicators, which can be divided into short-term moving averages trending upwards and long-term moving averages trending downwards; The short-term moving average trend is downward, while the long-term moving average trend is downward. So different strategies are adopted when two situations arise.

The shape when the short-term moving average trend is upward and the long-term moving average trend is downward:

As shown in the above figure, if the long-term moving average trend is downward and the short-term moving average trend is upward, it indicates a short-term market rebound. In practice, you can participate in buying, but you must sell at the end of the rebound.

The shape of the moving average when the short-term moving average trend is downward and the long-term moving average trend is upward:

The long-term moving average trend in the above chart is upward, while the short-term moving average trend is downward, indicating that the stock price has been rising for a period of time in the early stage, and the moving average trend is upward. However, the current stock price is gradually oscillating downwards from the top, which is a signal of a short-term peak and should be mainly sold.

Classic illustrations of several moving average charts:

1、 Multi head arrangement

Main features:

1. Appearing in the uptrend

2. Composed of short-term moving averages, medium-term moving averages, and long-term moving averages from top to bottom

3. The three moving averages form an upward curved bottom

Technical meaning:

Long signal, continue to be bullish

Operation suggestion:

In the early and middle stages of a long position, one can actively go long, but in the later stages, one should be cautious about going long

Main Tip:

Multi head arrangement is a broad concept. The wave rising shape, uphill climbing shape, rapid rising shape, accelerated rising shape, etc. listed in this table all belong to its category.

2、 Short position arrangement

1. Appearing in a downtrend

2. Composed of short-term, medium-term, and long-term moving averages from bottom to top

3. The three moving averages form a downward circular arc shape

Technical meaning: Short selling signal, continue to be bearish

Operation suggestion:

Short selling should be the main strategy in the early and middle stages of short placement, and caution should be exercised in the later stages. I know that many investors are currently trapped and suffering serious losses, mainly due to poor grasp of buying and selling points.

Main Tip:

The bearish arrangement is a broad concept. The forms listed in this table, such as wave descent, downhill landslide, rapid descent, accelerated descent, etc., all belong to its category.

3、 Golden Cross

Main features:

1. Appearing in the early stages of the rise

2. Composed of three short, medium, and long-term moving averages

3. The short-term moving average (fast line) crosses the long-term moving average (slow line)

Technical meaning:

Bottom signal, bullish outlook in the future

Operation suggestion:

1. After a significant drop in stock price, if this signal appears, one can actively go long

2. Medium to long-term investors can buy when this signal appears on the weekly or monthly candlestick

Main Tip:

The greater the angle at which two lines intersect, the stronger the rising signal

4、 Death Crossing

Main features:

1. Appearing in the early stages of a decline

3. The short-term moving average crosses the long-term moving average (slow line) from top to bottom

Technical meaning:

Peak signal, bearish outlook for the future market

Operation suggestion:

1. After a significant increase in stock price, if this signal appears, one can actively short sell

2. Medium to long-term investors can sell when this signal appears on the weekly or monthly candlestick

Main Tip:

The greater the angle at which two lines intersect, the stronger the downward signal

Short term stock selection precautions:

1. Attention should be paid to trading volume. An increase in trading volume means an increase in turnover rate, which reduces the upward selling pressure and leads to a sustained rise in stock prices.

2. Long term stocks require special attention when there are main players involved, as their stock characteristics may change due to their involvement;

3. Try not to touch weak stocks that are lagging behind the trend and switch to strong stocks;

4. Do not buy stocks that you are not familiar with.