What is turnover rate
A change of hands refers to the behavior of investors who bought at a low price after the stock price has risen for a period of time to sell the stock to make a profit, and the short position is waiting to be bought or the short position that is eager to cover borrows the behavior of buying when the stock price stops or falls. .
The hand-changing phenomenon mainly includes:
The rally has temporarily come to an end, and through adjustment or flattening, profit-seekers can take back their profits, and at the same time, they will prompt short positions to cover their positions and high-position distributors to cover them again;
The transaction is enthusiastic. Through the continuous enlargement of trading volume in the process of upward pull, a high turnover rate in the short term is realized, and large funds are actively exchanged and new funds are attracted to intervene.
Generally speaking, stocks with a high turnover rate have fully digested their chips, which raises the cost of the holders, and accordingly reduces the pressure on the sellers. The stocks with high turnover rate are highly speculative, and once the general trend is stable, they will have more outstanding performance.
However, the main bookmakers will also be confused, creating the illusion of a high turnover rate through the reverse of the chips in their hands, attracting more followers to follow up, in order to achieve the goal of smooth shipment. Turnover rate analysis is an important part of trading volume analysis and an important indicator for judging the comparison between long and short.
The meaning of turnover rate
1. The higher the stock's turnover rate, the more active the stock's trading and the higher people's willingness to buy the stock, which is a popular stock; conversely, the lower the stock's turnover rate, it means that the stock Few people pay attention to it, which is an unpopular stock.
3. The relatively high trading volume suddenly increases, and the willingness of the main force to distribute is very obvious. However, it is not easy to release the volume at the high position. Generally, the trading volume will be released when there are some positives, and the main force can be successfully completed. Distribution, there are many such examples.
4. Combining the turnover rate with the stock price trend can make certain predictions and judgments about the future stock price. The sudden increase in the turnover rate of a certain stock and the increase in trading volume may mean that investors are buying in large quantities, and the stock price may rise accordingly. If a stock has continued to rise for a period of time, and the turnover rate rises rapidly, it may mean that some profitees want to cash out, and the stock price may fall.
5. It is natural that the turnover rate of new stocks is high at the beginning of the listing, and the myth of unbeaten new shares has once been staged. However, with the changes in the market, it has become a reality for new shares to go higher and lower after they are listed. Obviously, there is no conclusion that a high turnover rate will definitely increase, but a high turnover rate is also an important factor supporting the rise in stock prices.
6. The first thing to do when digging for leading stocks is to dig out popular stocks, and one of the effective indicators for judging whether it is a popular stock is the turnover rate. The turnover rate is high and shares tend to be more active. Therefore, when selecting stocks, investors can put the stocks whose daily turnover rate has been continuously multiplied into their own choice or notebook, and then select the best varieties based on some fundamentals and other technical aspects.
How to observe the turnover rate , the following situations are mainly for small and medium-cap stocks, depending on the status of the main funds and operating strategies
The higher the turnover rate of stocks, the more active stock trading, that is, the higher the enthusiasm of investors, and the corresponding stocks are popular stocks; on the contrary, the lower the turnover rate of stocks indicates that the stocks lack investor attention. Unpopular stocks tend to have relatively small fluctuations in their stock prices, and they prefer to follow the ECG trend on time-sharing.
Below 1%, absolute amount.
1%-2%, the transaction is sluggish.
2%-3%, moderate transactions.
For the situation where the turnover rate is less than 3%, investors should pay attention to two situations: one is the retail market without the participation of the market maker;
The other is that the stocks fluctuate sideways in the relatively high area after the stocks have increased in volume. If there is a low turnover rate and small turnover, it means that the dealer has no plans to ship and is ready to set new highs.
3%-5%, the transaction is active. The market makers are also actively participating, and stockholders can analyze the next move of the market makers based on the previous stock trends.
5%-10%, highly active. The chips are changing hands sharply, and if it appears at a high position, the possibility of the dealer's shipment is very high.
10%-15%, very active. If it is not in the rising historical high area or the mid-to-long-term peak period, it means that the strong stocks are operating vigorously.
More than 15%, too active. There must be a demon in this matter. When the stock price is at a high level, most of the main market makers are lightening their shipments; if the stock price is at a low level, the main market makers are mostly attracting money. We can also see by looking at the chart below that in this case, most of the market has fallen sharply.