The "80/20" phenomenon in the market is becoming increasingly severe, to the extent that many friends believe that the ultimate collapse of the "2" will cause the entire market to collapse. However, this is only a vague feeling. If we quantify it, we will find that many stocks in this "eight" have already fallen miserably, not to mention many good stocks that were mistakenly killed. Even a large number of speculative stocks are facing the embarrassing situation of the main force being unable to escape. Many investors have even exclaimed, 'Where is this a bull market, isn't it a bear market?'. So, even if this "two" falls one day, a large part of the "eight" will stand up. It is worth noting that the average price to earnings ratio of the Shanghai stock market has dropped to over 40 times.
For us, choosing positions for next year as the end of the year approaches is of utmost importance. Therefore, the good stocks that have been wrongly killed in the "eight" are important targets, especially the wrongly killed stocks among some circulating shareholders that have not yet been participated in by institutions, which are worth studying carefully. Among them, building large positions is an important indicator.
Perhaps it's a bit off topic to talk about large order building at the current position, but due to the existence of stock killing errors, the phenomenon of large order building has indeed emerged. Although it is not common for major funds to build positions, there are still many institutions, especially those similar to funds, that are building positions for next year's layout. The large orders of institutions belong to one-time orders but need to be completed multiple times, which is very different from the main warehouse building. Therefore, it is necessary to distinguish between these two types of buying orders.
The nature of institutional large orders is similar to market individual orders, except that the volume of each order is larger than that of market individual orders, and there is a similar mentality in specific operations. When the market is good, go up; when the market is bad, stop for a moment. Compared to the main force of building positions, building large orders is more straightforward. As long as there are large pending orders within the authorized range, they will be taken down. The stock price may soar by a few percentage points within a few minutes, and then the market will return to a calm state of small pending orders. If it is the main force building a warehouse, they will be very cautious and generally will not have obvious sweeping actions, and most of them will also put up big selling orders in the upper tier.
If the volume of a one-time large order is relatively large, there will also be times when the stock price will be suppressed, such as during the intraday plunge or when the market falls back at the end. For funds, although the principle of completing large orders is mainly based on buying, it is not ruled out that they may join forces to suppress stock prices, but this suppression is significantly different from the main force suppression. The main force will always have pressure and suppression actions during the process of building positions, and the suppression of one-time large orders is just a simple price drop, and the pressure on the upper level is not very large.
If we are still wondering if we have found the wrong stock to kill, then now that we have found signs of large orders building positions, what we have found is the wrong stock to kill.
