Six classic bottom banker analysis techniques and practical skills

The most common classic bottom forms in the stock market are: circular bottom, V-shaped bottom, double bottom, hidden bottom, and head and shoulder bottom. Their specific morphological analysis is as follows:

1、 Arc bottom. The arc-shaped bottom refers to the bottom shape of the average price line of the K-line when the stock price is in the low price zone. The reason for the formation of this pattern is due to some long funds gradually building positions in small amounts, indicating that the stock price has found support for a temporary bottom. Its theoretical increase is usually twice the increase from the lowest price to the neck line level.

2、 V-shaped base. Commonly known as "sharp bottom", the shape trend resembles a "V" shape. It has the shortest formation time, is the most difficult to judge, and has the highest participation risk. But this form has the strongest explosive power, and if well grasped, it can win huge profits in the short term. Its formation is due to panic selling caused by negative market sentiment or other unexpected circumstances, leading to oversold stock prices and resulting in retaliatory market reversals.

3、 Double bottom. The stock price trend resembles the letter "W", also known as a W-shaped bottom. It is a relatively reliable reversal pattern, such as the double bottom pattern at the bottom of over 1300 points this year. The key to analyzing this pattern is whether the technical indicators will exhibit divergence characteristics when the stock price reaches the bottom on the right side. If the technical indicators do not deviate, the W-shaped bottom may transform into other patterns, such as multiple bottoms. Even if the W-shaped bottom is eventually established, its upward momentum will be weaker.

4、 Undercover. The stock price moves horizontally or slowly declines within an extremely narrow range, with small fluctuations in daily stock price fluctuations and sparse trading volume, resembling a snake lurking at the bottom during hibernation. This pattern is called a hidden bottom. Usually, the incubation period is relatively long, but the surge in trading volume and stock price generated after its breakthrough is also astonishing. So, the hidden bottom refers to how long it is horizontally and how high it is vertically.

5、 Head, shoulders, and bottom. Its shape presents three distinct troughs, with the middle trough being lower than the lower troughs of the other two troughs. The key to assessing the head, shoulders, and bottom is the trading volume and neck line. The trading volume should be in a moderate amplification state, and the amount on the right shoulder should be significantly greater than that on the left shoulder. When the stock price successfully breaks through the neck line on the basis of quantity matching, it is the best buying point for this form.

6、 Triple bottom. The triple bottom is not only a variant form of the head shoulder bottom, but also a composite form of the W-shaped bottom. Compared to the W-shaped bottom and the head shoulder bottom, the triple bottom is relatively rare, but it is a more solid bottom form than the latter two, and the upward attacking force after the formation of the form is also stronger. The establishment of its form must wait for effective upward breakthrough of the neck line before it can be finally confirmed. Because the theoretical increase after the triple bottom breaks through the neck line level will be greater than or equal to the distance from the low point to the neck line level. So, even if investors intervene after the formation is established, there is still a significant profit margin.

In the process of using bottom forms for speculation, the most critical factor determining success or failure is the credibility of identifying the bottom form. These five classic bottom form analysis techniques are as follows:

1、 According to the length of time it takes for the bottom shape to form, it can be divided into long-term bottom shapes formed over several months; The mid-term bottom shape formed in a few weeks; The short-term bottom pattern formed over a few days and the intraday bottom pattern formed on the intraday timeline. Due to the time constraints of market makers' trading costs, the main players are unable to draw charts and cheat lines in the long-term trend. So, the longer the time span of the bottom shape, the higher the credibility, and the easier it is to form a historic bottom.

2、 Because small cap stocks are easily controlled by market makers, the bottom pattern of large cap stocks is relatively more reliable than that of small cap stocks, and the bottom pattern of indices is often more reliable than that of individual stocks.

3、 After the successful construction of the bottom shape, if there is a moderate increase in trading volume during the upward trend on the right side, it is more reliable. The continuous rise without quantity coordination often indicates that the market makers have already taken control of the market. Whether this bottom shape is reliable still needs to be confirmed by combining other analytical methods.

4、 If there are some irregular shapes in the construction process of the bottom form, it is often a naturally formed state, which is more reliable. On the contrary, if the bottom structure is constructed too perfectly, it may be the deliberate action of the market makers, and investors must be vigilant.