What is a dark horse stock? The so-called 'dark horse stocks' refer to stocks that are abnormally active in the stock market, often stand out, and have great development prospects beyond the norm. If investors invest in this type of stock, they often reap substantial profits. So, how can we know if we are investing in dark horse stocks? It is necessary to master the pre launch form of dark horse stocks.
In fact, the launch of dark horse stocks is not an accidental phenomenon, as there must be hidden big stocks among them. Since it belongs to dark horse stocks, there must be a large-scale process of main players building positions before the stock price starts, either long-term hidden positions, or rapid volume boosting positions. Therefore, only when the main force relies on its financial strength to collect the vast majority of circulating chips, does the stock have the prerequisite conditions to become a dark horse stock. Generally speaking, there are several forms of dark horse stocks before their launch.
1、 K-line shape
The K-line shape of dark horse stocks during bottom sideways trading is arranged tightly and neatly, presenting a fragmented appearance, also known as the "bean arrangement", with distinct characteristics. When the stock price oscillates at a low level, special patterns often appear with a frequency that exceeds the probability of randomness. Typical examples include small bullish and bearish candlesticks with long upper and lower shadows, and the daily trading volume is mainly concentrated in the upper shadow area, while there is a large infinite bearish candlestick in the lower shadow area. Many upper shadows come from significant infinite pressure near the closing; After jumping short and opening high, it took advantage of the situation and closed with a large bearish candlestick. At the same time, the trading volume significantly increased, but there was no further increase in volume afterwards. Instead, it quickly shrunk, and the stock price fell back into a seemingly disorderly state of movement; After a small gap and opening low, it took advantage of the situation and pushed up. In the end, it closed with a bald bullish candlestick, even showing a significant increase in trading volume. However, the next day, it was suppressed by a very small trading volume. If these forms appear frequently, they are likely to be traces left by the main force's suppression of fundraising.
2、 The floating chips in the stock market have decreased, and the amplitude of stock prices has narrowed
If there is no main force involved, the trading volume of the market is unusually light, and there is usually a phased volume trading process for multiple consecutive trading days before the start.
3、 Long term flattening of the average quantity line
Many dark horse stocks experience a significant decrease in trading volume during bottom sideways trading, resulting in a long-term flattening of the average volume line on the trading volume indicator.
4、 The trading volume is constantly changing
The phenomenon of stagflation often occurs when the trading volume significantly increases and the increase is not high, but then the trading volume shrinks at an extremely fast speed during the downward process. Sometimes, after a small increase, the trading volume does not rise or fall. Although the trading volume is not as large as when it rose, it remains at a relatively active level and begins to shrink after one to two months. Due to the ratio of the main force's inflow to outflow, the chips in their hands will continue to increase over time.
5、 The K-line indicators are all at a low level
The low level of the daily candlestick indicator does not necessarily indicate anything. The main force can easily lower the daily candlestick indicator, especially the technical indicators familiar to investors such as KDJ and RSI, by relying on their financial strength. So, only when both the weekly and monthly candlestick indicators are at a low level, can the stock truly possess the potential qualities of a dark horse stock. The weekly candlestick and monthly candlestick reflect the trading situation for a week and a month, respectively. Large fluctuations in the short-term candlestick are usually filtered and smoothed out on the weekly candlestick and monthly candlestick. In the implementation of operations, first analyze whether the weekly and monthly candlesticks are safe, and then analyze whether the combination of daily candlesticks and the relationship between volume and price are reasonable, which is easier to catch big dark horses.
As the saying goes, 'Heroes emerge in troubled times'. If a stock is a super dark horse stock, it will inevitably rise. Since it is going to rise, many times it is the market that is falling, but it is still rising! Based on this, searching for such super dark horse stocks can record the individual stocks that rise every time the market falls, especially when the market crashes. So, with continuous observation and statistics for a week, if a stock is constantly rising while the market is falling, and often rises along with the market's rise, then such a stock can be considered a super dark horse stock.
