Market makers who attract funds often leave a low concentration area in the chip distribution. In most cases, after completing the low concentration, market makers are not in a hurry to raise the stock price, and even intentionally push it back below the low concentration area, because there is basically no selling pressure in this area, and all investors are in a shallow position, making it relatively easier to protect the market.
Once the time is ripe, the market maker will first pull the stock price from below the low concentration area to above the concentration area, forming an upward crossing of the chip concentration area. The difficulty of this crossing process depends on the market maker's position status. If the main force holds a large amount of positions, there will not be too many sell offs on the market, that is, the stock price will cross the concentration area and show an empty position. At this point, we can know that the stock has been highly held by the market maker.
Technically, we must provide a clear reference standard for the market characteristic of "no volume", that is, using turnover rate to accurately estimate trading volume. Usually, we do not simply use trading volume as a technical parameter, because the trading volume of a stock varies greatly, and the same trading volume does not necessarily indicate whether the stock has undergone significant turnover or basically no turnover. Monitoring profit selling pressure through volume expansion and contraction is not a good method, while turnover rate can fundamentally reveal the significance of trading volume. Based on my experience, the turnover rate can be divided into the following levels:
Absolute land mass: less than 1%; Low transaction volume: 1% -2%; Moderate transaction volume: 2% -3%; Transaction activity: 3% -5%; Volume: 5% -8%; Volume increase: 8% -15%; Massive: 15% -25%; Abnormal transaction: greater than 25%.
People often use 3% as the standard and refer to transactions below 3% as "zero volume", which is widely recognized. The stricter standard is 2%. At the end of March 1999, the stock price of Variety Show was only 8.11 yuan (compound price). At that time, the stock was crossing from the bottom of the chip intensive area, but its turnover rate was very small. On March 23, the turnover rate was only 1.74%, belonging to the category of low trading volume. During the process of crossing the chip intensive area, about 60% of the chips were released, and the unsold chips accounted for 60% of the circulating shares. It can be concluded that the majority of these 60% chips are owned by the banker. The subsequent trend of the stock is well known, and on February 21, 2000, the stock reached its highest price of 63.95 yuan.
The above is a method of determining the position of the banker through the unlimited upward crossing of the chip intensive area. Once it is found that the chip intensive area crosses upwards with low trading volume, most of the crossed chips are the main holdings. Although this method of estimating the position of the market maker is simple, it has great reference value for low-level market manipulation.
