The legendary woman who was reborn from the ashes

Chapter 117 Selection of Stocks Prone to Daily Limit-up 2

In the stock market, stock selection is an art and a science. Technical stock selection is an important part of this science. It uses statistical analysis of market data such as stock prices and trading volumes to dig out the inherent laws of stock operations and predict possible future trends.

Flag pattern stock selection:

Flag consolidation is a stock that is ready to go. The flag consolidation pattern is like the formation change on the battlefield. It is similar to the wedge and box consolidation but not exactly the same. The characteristic of the flag consolidation is that the high and low point lines are like two parallel lines, always maintaining a stable distance, without any signs of contraction.

Compared with the box consolidation, the high and low points of the flag are not horizontally extended, but may show an upward or downward trend. Although the shapes are different, their technical characteristics are quite similar, representing a kind of accumulation and preparation of power.

At the end of the consolidation, these stocks are often able to demonstrate amazing explosive power and amaze the market with their large-volume limit-up.

Volume ratio stock selection:

The volume ratio star stocks that show strong performance at the opening. The volume ratio is like the pulse of the market, and its beating reflects the trading activity. Stocks with a significant increase in volume ratio mean that funds are surging and trading is active on that day, and the stock price often fluctuates greatly, and even achieves a sharp rise or a daily limit.

Especially those stocks whose technical patterns are at the bottom area, whose trading volume has shrunk relatively in the previous period, but suddenly show abnormal movements in volume ratio, are worthy of investors' close attention.

Call auction stock selection:

The leaders of the increase stand out in the call auction. The call auction, a short ten minutes, is the key moment when the main funds surge.

For those stocks that are scheduled to open or reach the daily limit during trading, the performance within these ten minutes is crucial. When buy orders are enthusiastic and the increase is steadily climbing, especially when buy orders continue to increase after 9:20, these stocks are often able to open higher and move higher after the call auction ends.

Therefore, individual stocks with the highest increase after the call auction (such as the top 20 stocks with the highest increase) often have a higher potential for daily limit increase, as long as the overall performance of the market is not too weak.

Moving average stock selection:

Moving averages are close together and waiting for potential stocks to break through. Moving averages are close together, which is a manifestation of the temporary balance of long and short forces in the market. When the short, medium and long-term moving averages of individual stocks are closely together, it means that the average holding cost of the market is roughly the same during this period.

This state of balance is often accompanied by a shrinking trading volume, or even reaching a low level. However, once funds flow in, the bulls can break this balance with a little effort, pushing the stock price up sharply, or even reaching the daily limit.

The upward divergence of the moving average indicates a strong rise in individual stocks. The upward divergence of the moving average is a clear signal that the stock price is accelerating. When the stock price gradually moves away from its short-, medium- and long-term moving averages, it shows that the market bulls have an absolute advantage and the stock price has strong momentum to rise. Individual stocks in this form can often maintain a strong upward trend and bring rich returns to investors.

In the detailed study of the investment market, the rising angle of short-term moving averages such as the 5-day moving average is becoming steeper and steeper, which is often a great opportunity to capture stocks that have reached their daily limit. Behind this phenomenon is the dynamic change of market psychology. As stock prices continue to rise, short-term investors are increasingly afraid of high prices and are worried about the coming risks, so they choose to sell their chips.

In this process, short-term profit-making chips gradually flow out, while the proportion of holdings of major funds quietly increases. As the main chips become increasingly concentrated, it becomes easier to pull up the stock price, so there is often an accelerated rise, among which the limit-up phenomenon is particularly prominent.

From the perspective of medium and long-term investment, the 120-day moving average undoubtedly plays a pivotal role. This moving average is regarded as the "soul line" of stock price trends, and short-term, medium-term and long-term investors all pay close attention to it.

For short-term investors, the 120-day moving average is an insurmountable obstacle, it has strong resistance, and the stock price often needs to go through repeated washes and large volumes before it can successfully break through. For medium and long-term investors, the 120-day moving average is a solid line of defense with strong support.

It is particularly noteworthy that when the stock price has experienced a long period of decline, if it can stop falling near the 120-day moving average and successfully stabilize, it often indicates that the main funds are determined to go long. At this time, the stock price often chooses to break through the suppression of the 120-day moving average in the form of a large positive line or a daily limit large positive line, especially when the 120-day moving average is flat, the possibility of such a breakthrough is greater.

As another important moving average indicator, the 250-day moving average has the same technical significance as the 120-day moving average. However, the 250-day moving average is more favored by long-term investors because it is regarded as the dividing line between the bull and bear markets.

Once the stock price effectively breaks through the 250-day moving average, it often means the arrival of a mid-term upward trend; on the contrary, if the stock price falls below the 250-day moving average, it may indicate the arrival of a mid-term adjustment.

Stock selection when volume shrinks and the neckline falls back:

The pattern of shrinking volume and stepping back on the neckline is also worthy of investors' attention. The neckline is usually the high point connection position of the head and shoulders bottom, double bottom, W bottom and other patterns. If the stock price wants to effectively break through these patterns, it must break through with large volume near the neckline.

After the breakthrough, there will be a shrinking volume retracement to the neckline to confirm the effectiveness of the breakthrough. This process is usually shrinking, showing that the market chips are well locked. Once the retracement is confirmed successfully, the stock price will often rise again with large volume, and even show a trend of daily limit.

For savvy investors, in-depth analysis of the trend of short-term moving averages, paying attention to the support and resistance of important moving averages, and capturing opportunities for individual stocks that shrink and fall back to the neckline are all important ways to increase the success rate of investment.

Morning Star Stock Picks:

Morning Star is not only a K-line combination, but also a unique dawn in the stock market, indicating that the stock price is about to usher in the moment of dawn.

Its appearance is often like a signal that the stock market is gradually waking up from its slumber, suggesting that the bottom is within reach. In the trading days after the formation of the Morning Star, the stock price often shows an impressive trend, and daily limit increases are common.

Especially when the Morning Star is accompanied by a downward gap and an upward gap, it is an explosion of the market's long-accumulated rebound force, leading the stock price to sprint towards a new high.

Star stock selection on the board:

Stars on the board are a unique landscape in the stock market. They often appear after a daily limit or a big positive line, like bright stars in the night sky, heralding the arrival of a new round of rising market.

The shapes of the stars on the board vary. Some are cross stars that jump up, while others are small real body K-lines with upper and lower shadows.

These are all traces of the main force building short-term positions. As long as the gap is not filled and the trading volume is multiplied, the space for short-term stock price increases will open up, and it may even be possible for the stock price to reach the daily limit again.

The immortal guides the way to stock selection:

Fairy pointing the way, this is a mysterious K-line pattern. It usually appears at key positions such as the previous high point, the historical highest point or the previous transaction concentration area, just like a fairy guiding the direction of the stock price.

This is the performance of the main force testing the upper pressure and strong washing, aiming to successfully break through various pressure levels in the early stage. Once the "fairy pointing the way" appears, it means that the stock price is about to usher in the dawn of short-term rise, and the next day after this pattern is closed, the strong daily limit trend will come as expected.

Stock selection based on staking volume:

The pile volume is a significant sign that the main force is forcibly building a position. In the stock market, in order to obtain chips to the greatest extent, the main force often chooses to pull the daily limit and release a huge amount to absorb chips.

The emergence of pile-up volume is the best proof of this process. It not only represents the determination and strength of the main force to build a position, but also indicates the possible room for stock price to rise in the future. On the day when pile-up volume appears, the stock price is often easy to reach the daily limit;

In the next three trading days, as long as the stock price does not fall below the lowest point of the day, the possibility of a daily limit is still very high. This is a strategy adopted by the main force to quickly raise the stock price and get out of the cost area.

Breakout Gap Stock Picks:

Breakthrough gap is a beautiful sight in the stock market. It usually appears at key positions such as the starting point of the market or the previous high point, just like the first ray of sunshine before dawn, illuminating the way for stock prices to rise.

The emergence of a breakthrough gap often means that the stock price has broken through the previous pressure level and opened up new room for growth. In this case, the main force will often take advantage of the situation to push up the stock price, making the breakthrough gap the starting point of a new round of rising market.

For investors, seizing the opportunity of a breakthrough gap may allow them to capture a dramatic uptrend.

Technical stock selection is a stock selection method that focuses on data analysis and pattern mining. It requires investors to have solid basic knowledge of the stock market, keen market insight, and rigorous analytical skills. Only in this way can investors select high-quality stocks with potential in the complex stock market and achieve stable investment returns.

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