Article Directory
uptrend evolution
Multiple retracements and rises, range shocks
When the stock price retreats and rises repeatedly in the range, but does not break through the upper edge of the shock range, it will continue the horizontal adjustment trend.
This kind of horizontal adjustment trend usually indicates that the market sentiment is relatively hesitant, and investors lack a clear sense of direction, so it is difficult for the stock price to show an obvious upward or downward trend.
In terms of investment decision-making, when the stock price fluctuates within a range, investors can adopt a wait-and-see strategy, observe changes in factors such as market sentiment and company performance, and wait for the stock price to break through the range before making an operation. At the same time, investors can also consider performing band operations within the range according to their own investment goals and risk tolerance to obtain short-term returns. However, it should be noted that the horizontal adjustment trend may last for a long time, so investors need to be patient and cautious to avoid losses caused by blind operations.
Breakout to the upside, resuming the uptrend
When the stock price breaks through the top of the shock range by at least 3 points, the breakthrough confirmation is valid and enters a new upward trend.
This 3-point breakthrough standard is a relatively common market consensus, but the specific standard may vary depending on the market and individual stocks. The validity of this breakthrough can be confirmed in a number of ways, here are a few possible ones:
- Price Action: After a stock breaks out of a top, it is able to keep trading above it with increased volume. This shows market participants' approval of the breakout and that there is enough trading activity to support a rise in the stock price.
- Technical indicators: Using technical indicators such as relative strength index (RSI) or moving averages, etc., you can confirm whether the stock price has entered the overbought area, and there is enough buying pressure to support the stock price to rise.
- Fundamental factors: Fundamental factors such as company performance reports, earnings expectations, and the macroeconomic environment can also support breakouts and new uptrends in stock prices.
Early recovery highs lower, trend reversal warning signal
After the previous high point fell by at least 6 points, it rebounded again and failed to reach the height of the previous high point, and fell back by more than 3 points again, which constituted a trend reversal warning signal, which meant that the trend reversal was confirmed downward.
After reaching the previous high, the stock price failed to maintain this high level, but fell at least 6 points. This suggests that market forces may be shifting and that the bulls may be weakening. Subsequently, the stock price tried to rise again, but still failed to reach the previous high, which is a further indication that market forces are shifting.
Next, the stock price fell again by more than 3 points, which indicated that the market had confirmed the trend reversal, and the stock price would enter a downward trend. The emergence of this warning signal reminds investors to pay attention to risk control, avoid blindly chasing higher prices, and reduce losses.
A breakout to the downside, confirming a downtrend
When the stock price falls below the bottom of the previous shock range by more than 3 points, it becomes a downward trend.
This 3-point breaking standard is also a relatively common market consensus, but the specific standard may vary depending on the market and individual stocks. Confirmation of this downtrend can be confirmed in a number of ways, here are a few possible ways:
- Price Action: After a share price breaks below a previous bottom, it is able to stay trading below it, and the trading volume has increased. This shows that market participants recognize the downtrend, and that there is enough selling pressure to support a decline in the stock price.
- Technical indicators: Using technical indicators such as relative strength index (RSI) or moving average, you can confirm whether the stock price has entered the oversold area, and there is enough selling pressure to support the stock price decline.
- Fundamental factors: Fundamental factors such as a company's performance report, earnings expectations, and the macroeconomic environment can also support a downward trend in stock prices.
downtrend evolution
Multiple rebounds and retreats, range shocks
Breakout down, resumption of downtrend
Previous retracement low bounces, trend reversal warning signal
Breakout to the upside, confirming an uptrend
