How to use a K-line chart to identify the top of a stock? Practical Skills

When the stock price starts from the bottom and enters an upward channel, it is necessary to start monitoring the appearance of the top. At this time, the daily candlestick chart is generally no longer the main chart, but the 60 minute candlestick chart is the main chart. Because a 60 minute candlestick chart can more quickly reflect changes in stock prices than a daily candlestick chart, while other candlestick charts either change too frequently or change too slowly. But the reliability of daily or weekly candlestick charts is relatively high.

Set the system parameters of the price moving average in the 60 minute candlestick chart to 5, 10, and 20. Display K-line chart, trading volume chart, and MACD chart on the same screen (currently almost all stock software can do it). When the stock price rises from the bottom (or periodic bottom) to a certain height, if there are phenomena such as stock price stagnation, increased trading volume, stock price decline, and shrinking trading volume on the K-line chart, the price moving average, volume moving average, and MACD will gradually shift from rising to flat or falling. When the 5-unit line of the price moving average system crosses the 10 unit line and the fast line of MACD crosses the slow line, it indicates that there is a large amount of profit taking or market maker selling in this price range of the stock. Under normal circumstances, it can be considered that the stock price in this region has entered the top region (or phased top region), which signals that the market maker is selling or preparing for a correction and consolidation. At least the stock price will stay in this area for a period of time. If the 5 unit moving average of the stock price crosses the 20 unit line, the 10 unit moving average crosses the 20 unit line, and technical indicators such as K, D, J are used to confirm that this area is the top area (or a periodic top area). If the above situation occurs, investors should clear their positions. If it is a temporary top area, it can be intervened after the stock price stabilizes or effectively breaks through this area.