Among all the technical trends, the V-shaped reversal is undoubtedly the most anticipated. How to capture V-shaped reversal? The editor will tell everyone. Because if a V-shaped reversal occurs, both the overall market and individual stocks will experience significant upward momentum. Therefore, this trend is also highly desirable for investors during sustained market downturns. In this process of reversal and upward trend, individual stocks usually perform remarkably well, with significant gains and rapid upward movements in the short term. Here, we will analyze two scenarios: a V-shaped reversal in the overall market and a V-shaped reversal in individual stocks.

In terms of the overall market trend, the V-shaped reversal is mainly caused by the excessive sharp decline of the stock index in the early stage, which can lead to astonishing gains in the short term. The most typical examples are the reversal market in 1994 and 1999. This type of market often experiences a significant decline before it occurs, followed by oversold and then a retaliatory rebound triggered by some positive news. That is to say, it is a rebound market stimulated by both internal and external factors due to the huge accumulated losses. Moreover, in the initial stage, almost all individual stocks in the market show a significant upward trend. Soon after, individual stock trends diverge, but there will be mainstream hotspots that continue to rise. Investors can obtain very lucrative returns as long as they reach the bottom.

From the perspective of individual stocks, V-shaped reversals are more likely to be caused by sudden gains, usually due to the sudden release of important information that changes the fundamentals of listed companies. Prior to this, the stock price did not have a special reaction, and after the news became clear, the stock price often continued to rise by the limit up. There are many examples of this kind, such as Guojin Securities in history, Anxin Trust, and recently Waigaoqiao. Its characteristic is that the positive news is sudden and highly confidential in advance, so when the information is released, the stock price reaction is extremely strong. Or perhaps the previous stock price had some reaction but was not sufficient, due to the strong positive momentum, the early rise was not enough to reflect the changes in the company's fundamentals. When the information was released, the stock price rose rapidly. Of course, there are also some V-shaped reversal stocks that are technically speculative, where the main funds use short-term themes to make crazy gains, and the main funds involved often enter and exit quickly. But generally speaking, V-shaped reversals are mostly triggered by major positive stimuli in the market.

Investors should treat the V-shaped reversal of the overall market and individual stocks differently. If it is the former, investors generally have sufficient time to choose individual stock varieties, and at this time, almost all individual stocks have the opportunity, and investors can actively participate in building positions. Because the market tends to quickly rise in the future and complete a significant upward trend in a relatively short period of time, it is necessary to intervene in the early stages; If it is the latter, it is more difficult to seize the opportunity. Because many stocks often hit the limit up continuously without giving them a chance, but when they reach a significant level and investors have the opportunity to buy, it is generally a time of high risk. But there are two opportunities for such stocks: one is that if the first limit up is not firm, investors can actively participate; One approach is to have a brief adjustment after a surge, and then launch a second wave of impact, so active intervention can be taken during mid-term adjustments. But such situations are not common because they require a very strong positive stimulus.

Overall, both the V-shaped reversal market of the overall market and individual stocks are rare and unpredictable, with suddenness. However, relatively speaking, there is still a certain context for predicting the trend of the overall market, that is, the stock index often falls to a very low position, and the market is severely undervalued. At this time, any positive news will become the trigger for stimulating market reversal. Therefore, the occurrence of oversold in the market is a prerequisite for the rapid reversal of the overall market; For individual stocks, it is important to pay close attention to changes in the company's fundamentals and potential qualitative changes. However, if mistakes are discovered, early stop loss and exit should be implemented.