Bear market volatility stocks mainly refer to strong stocks that have abnormally increased trading volume and refuse to adjust during the repeated decline of the overall market index, which is different from most stocks that have experienced a single sided decline without volume. Due to the market's adjustment in a bear market, at least 80% of individual stocks have followed the trend and continuously declined with the decline of the overall market index, so the high volume and abnormal stocks in bear markets are actually obvious.
The problem is that when stock traders face bear market downturns, their common operating mentality is to be scared when they see the decline of the overall market and individual stocks. They often turn a blind eye to obvious high volume and volatile strong stocks, but always fantasize about one day being lucky enough to hit the bottom of the market. In fact, in a bear market, the safety and reliability of buying and selling strong stocks with high volatility and volume are far greater than most other stocks in the market that repeatedly fluctuate and consolidate, and are almost the only ones truly worth trading in a bear market. We take Tianzhou Culture, the most typical strong and volatile stock in the Shanghai and Shenzhen stock markets in the past six months, as an example to illustrate how to capture bear market volatile stocks.
Firstly, in a bear market, the price fluctuations of strong stocks are likely to gradually move towards a bullish position in the short to medium term moving average system, rather than a "V" - shaped reversal trend after a bearish position. Since early July 2011, the 5-day, 10 day, and 30 day moving averages of Tianzhou Culture have been fluctuating horizontally, waiting for the 60 day medium-term moving average to gradually shift from a bearish position to a horizontal position. This type of moving average arrangement is rare in a bear market situation, and it is easy for stock traders to observe and should be taken seriously. This is a prerequisite for the formation of dark horses in bear markets.
Secondly, in the price fluctuation trend of strong stocks in bear markets, there will always be several abnormal increases in trading volume while the stock price remains stagnant, that is, funds will exert pressure to attract funds under the influence of potential major positive factors; And the daily turnover rate should be at least 10% or higher, with a turnover rate of 20% or higher being more reliable. On the eve of a significant abnormal wave of growth, Tianzhou Culture experienced several increases in volume. On August 4, 2011, the turnover rate was 14%, on August 12, 2011, it was 17%, and on August 22, 2011, it was 22%. Abnormal daily trading volume is an important market characteristic for observing and capturing the volatility of strong stocks in bear markets. In a bear market, due to the generally wait-and-see mentality of stock traders, a band of gains without abnormally increased trading volume support is an unreliable and unsafe false rise.
Thirdly, when a strong stock in a bear market officially starts a significant upward trend, its daily MACD should mostly be above the zero axis, which is an important technical indicator characteristic that distinguishes it from other weak falling stocks in the market where MACD is below the zero axis. When Tianzhou Culture started to rise in mid October 2011, the daily MACD was attacking upwards near the 0 axis with a golden cross. From a purely technical perspective, stocks with daily MACD below the 0 axis in a bear market adjustment market are almost impossible to be volatile strong stocks, and the "V" - shaped reversal trend in the daily candlestick chart is only an exception.
Fourthly, the best time to intervene in the trading of strong stocks during bear market fluctuations should be when the 5-day, 10 day, 30 day, and 60 day moving averages are arranged in a regular long position, and the stock price is firmly above the 5-day moving average. At the same time, the daily MACD is running above the 0 axis with a golden cross, indicating that the price trend of the trading band has been fully formed, and the stock price will rise rapidly without resistance, breaking away from the price cost zone near the short - and medium-term moving averages. The best and safest time to buy after the rise of Tianzhou Culture should be during the five trading days from October 17 to 24, 2011. At this time, the upward trend of the band is unstoppable, and attacking the stock price along the minimum resistance line is a high probability event. Therefore, it is a safe operation opportunity to capture bear market volume trading stocks.
Fifthly, the selling opportunity for strong stocks in bear markets after experiencing significant increases along the band trend is when the stock price effectively falls below the 10 day moving average from a relatively high level, and at the same time, the daily MACD moves downwards at a relatively high dead cross.
