The stock market is like a perpetual gamble, it has no beginning and no end. You are constantly faced with action choices. The risks in the stock market are always present, and regardless of the period the stock market is in, it is necessary to have risk awareness and be prepared to control risks. The stock market is divided into bull market, volatile market, and bear market, and different methods are used in different markets. Today, we will mainly talk about how to grasp the oversold rebound in a bear market.
Oversold rebound is an adjective that tells you that after falling for a long time, it will rise; At the same time, a oversold rebound is also an action that tells you that the trend of stocks or the overall market is somewhat like drawing a "hook", except that the handwriting behind is shorter and smoother than before. This is a typical downward trend. Some stocks in the stock market may show signs of oversold, but many friends do not understand the logic of doing oversold, and as a result, they find that they die every time they buy the bottom, and ultimately do not believe in oversold. Here, we will once again systematically analyze the precautions for oversold rebounds, and also hope that when applying indicators, we can understand their logic. A foolproof one click operation may end up being stuck halfway up the mountain.
What should we pay attention to when oversold rebounds? How to operate it better
1、 Being indecisive is a big taboo. Due to the fleeting timing of buying and selling in a oversold rebound market, investors need to be decisive, not only when buying, but also when selling. Indecision is a major taboo when participating in a rebound market. If there is a mistake during the rebound, it is necessary to sell decisively and not turn proactive rebound operations into passive medium-term or long-term stock holding.
2、 Quick victory is fundamental. Since rebounding is a form of grabbing, one must act quickly. The buying and selling opportunities in a rebound market are often fleeting, therefore, investors are required to be fast in and fast out when participating in rebound market operations. Only by fast forward can we seize the opportunity of rebound, and only by fast out can we avoid being trapped by the rebound market. If investors are indecisive in personality and lack experience and ability in short-term quick operations technically, they are not suitable for seizing rebounds. To avoid losing out on small gains and being trapped in high positions.
3、 Establish stop loss protection for safety. A rebound is not a fundamental reversal of market trends, and there is still a possibility of another decline in the stock market. The most likely reason for investors to fail when they try to rebound is that when a small mistake occurs in actual operation, causing the stocks that are trying to rebound to become shallowly trapped, investors are often unwilling to stop loss and sell. As a result, the rebound market that was originally a short-term participation was turned into a medium-term or even long-term trend. Therefore, investors should set a stop loss point before rebounding, and immediately sell when the stock price falls to the stop loss point to avoid being deeply trapped.
4、 Take it easy and not be greedy. The rebound market contains a considerable amount of uncertainty, and the profit margin of the rebound is often limited by the weakening market trend. So, when seizing a rebound, it is important to take advantage of the situation and take timely profits. We cannot have unrealistic illusions about the profits that may be obtained in a rebound market, let alone set specific profit targets. The basic principle of participating in the rebound market is to 'go if you win, and go if you can't win'.
Stock selection method for oversold rebound
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.
2. Stocks with active stock characteristics are the easiest targets for financial attacks
Every time a certain degree of oversold rebound is initiated, those stocks with active characteristics 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
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.
The buying opportunity for oversold rebound
1. In terms of price, if the opening price the next day is about 2% lower than yesterday's closing price and maintains a flat consolidation pattern, it is appropriate to build a position; If the stock price opens flat or jumps short and opens high, it should intervene after the second dip of the stock price; If there is a significant downward trend after the opening, we should remain cautious and wait for clear signs of stabilization in the next few trading days before intervening.
2. In terms of time, when the market is in a very weak state, its rebound often occurs one hour before the closing.
3. From the perspective of trading volume, the daily trading volume on the first day of the rebound should be more than twice the daily volume of 8 days, and the daily trading volume thereafter should remain above the daily volume of 8 days. If the daily trading volume rapidly shrinks after reaching a daily high, it is often an important signal of a short-term peak.
