First of all, let's look at the definition of a shrinking cross star. The shrinking cross star consists of a smaller cross star line, which usually appears in an upward or downward trend. There is usually a sharp fluctuation before the appearance of the shrinking cross star. After the appearance of the shrinking cross star, it shows that the market sentiment tends to be calm and the trading volume has decreased, but there are still contradictions in investors' psychology.
Then, what may happen to the trend after shrinking the cross star? It can be discussed from the following three angles.
1. Support and resistance potential analysis
After the shrinking cross star appears, the trend can be predicted by analyzing the support level and resistance level. If the shrinking cross shows a downward trend, and then the stock price breaks through the resistance level of the shrinking cross, it may continue to rise and there will be a wave of rebound. Conversely, if the stock price falls below the support level of the shrinking cross star, it may fall further. Therefore, we need to predict the trend of stock price according to the data on the K-line chart and combined with technical analysis.
2. Judgment of the previous trend
After the shrinking cross star appears, we need to judge the trend type in its early stage, whether it is an upward trend or a downward trend. If it is a shrinking cross star in the upward trend, it may indicate that the market sentiment is changing, and the stock price may continue to rise or adjust. If it is a shrinking cross star in the downward trend, then the market sentiment may rebound, but it may not necessarily lead to a rebound in the stock price, and further observation of the market situation is needed.
3. Judgment of morphological structure
Shrinking cross star is a neutral small form, which usually needs to be combined with other forms to judge the trend. For example, in the downward trend, if there is a shrinking cross star, followed by a big positive line or a negative line, then it is very likely that there will be a market reversal. Therefore, it is necessary to pay attention to other forms on the K-line diagram and make a comprehensive judgment by combining other analysis methods.
Based on the analysis of the above three angles, we can better judge the trend of the cross star after shrinkage and provide reference for investment decision. However, it should be noted that there are uncertain risks in the stock market, and investors need to make rational investment decisions according to their own risk tolerance and investment objectives.