2. The overbought and oversold range of individual stocks is slightly different with different price ratios, but it is generally between plus and minus 6.5.
3. When ROC reaches the oversold level, buy it; When it reaches the overbought level, sell it.
4.ROC can also deviate from the stock price.
Generally speaking, for stocks that can only reach the overbought line 1 (parameter value 5- 10), investors will run if they want to see profits; For the stock that can reach the overbought line 2 (parameter value 12- 17), the band is correspondingly high in selling and low in attracting. Once a stock can get rid of these two normal overbought lines and challenge the third overbought line (parameter value 18-35), the market will often turn into a fanatical extreme market. Among them, 60% to 70% of the stocks will be interpreted as big black horses or independent bull stocks with record highs. We found that the success rate of stock dark horse with the following characteristics is higher:
1. Before the market started, the first wave of ROC rose to the third overbought line when the bottom volume changed hands to attract sufficient funds. Because when the market rebounds due to favorable policies, the stocks with sufficient main funds tend to perform strongly, and among these stocks, there is a 75% probability of dark horses.
2. On the attack day, the turnover rate was 3.5%-6%, and the first wave of attacks rose by more than 25%. After the stock price correction, the overall attack angle can still be maintained above 45 degrees. Once the ROC index of the first peak reaches the third overbought line, its future trend tends to be outstanding, and investors should intervene in the mid-line callback.
3. For leading stocks that have reached the third overbought line, investors can intervene decisively once they encounter the rapid dishwashing of the main force. Among them, ROC broke through the zero line upward and entered a strong area, indicating that many parties have strong strength and are auxiliary short-term buying signals.
4. When the stock price starts to rise after the second wave of washing, the 20-day or 40-day moving average system of the middle line takes the lead in sorting out, and the bulls are arranged before the market. For this kind of oversold stocks, the second wave often shows a super trend of "up, up, up".
5. For this super-strong leading stock, investors should also combine SAR stop loss index, EXPMA downward death *, or 45-degree line to operate, which is also a good strategy to ensure its profitability.
Actual case: On 23/2002 1 month, Aijian shares (600643) experienced a V-shaped sharp bottom reversal at 6.22 yuan, and its ROC index reached 36.68 on 7 February, and its share price also reached a new high. It was not until March 13 10.87 yuan that the stock responded in the middle line, and the stock price was blocked from rapid washing. On June 7th, its ROC index crossed the 0-axis, and its corresponding 10 moving average turned its head upwards, and the volume and price matched well. Subsequently, the stock once again started the second wave of rising prices, and the first line from 9 yuan to 9.3 yuan became an excellent buying point for the stock. Since then, the stock has hit a new high through radical change of hands, becoming a striking independent bull stock.
ROC index
ROC is strong when it goes up, with 100 as the center line, and when it crosses above 100 from the center line, it is a buy signal.
(ROC indicates weakness when going down, with 100 as the center line, and when it falls below 100 from the center line, it is the selling signal.
(3) When the stock price reached a new high, ROC failed to reach a new high and deviated, indicating the formation of the head.
(4) When the stock price hit a new low, ROC failed to hit a new low and deviated, indicating that the bottom was formed. RSI
Relative strength index RSI was first used in futures trading. Later, it was found that it was also very effective in guiding the investment in the stock market, and the characteristics of this index were constantly summarized and summarized. Now, RSI has become one of the most widely used technical indicators for investors. According to the general principle of investment, investors' buying and selling behavior is a reflection of the comprehensive results of various factors, and the change of the market ultimately depends on the relationship between supply and demand, while the RSI index is based on the principle of balance between supply and demand, by measuring the total range of stock price rise in a certain period.
The percentage of the average value of the total range of price changes is used to evaluate the strength of long and short forces, and then the specific operation is prompted. On the surface, the application rules of RSI are complicated, including the judgment principles of intersection, value, shape and deviation. However, because RSI contains the judgment methods of almost all commonly used indicators, it will be helpful for investors to understand and apply other technical indicators if they can fully grasp the application rules of RSI.
Regarding the use of RSI, we should first observe the positional relationship between two or more curves with different parameters.
The RSI curves with different parameters are used in exactly the same way as the moving average. If the short-term RSI curve with smaller parameters is above the long-term RSI curve with larger parameters, then the current market is a bull market. On the contrary, it is a short market. Because the larger the parameters, the larger the time range of RSI calculation, so the conclusion will be more reliable. But like EMA system, we can't avoid the shortcoming of slow response, so we should pay attention to it during use.
RSI value to determine the direction of operation.
The RSI value divides the range from 0 to 100 into four regions: extremely weak, weak, strong and extremely strong. The dividing line between "strong" and "weak" is 50, but the boundaries between "extremely weak" and "strong" and "extremely strong" will change with the change of RSI parameters. The division of regions is different with different parameters. Generally speaking, the larger the parameter, the closer the dividing line is to the center line 50 and the farther it is from l00 and 0. However, it should generally be in the range of15,30 to 70,85. If the RSI value exceeds 50, it means that the market has entered a strong market and can consider buying. However, if it continues to enter the "extremely strong" area, it is necessary to consider the extremes meet and prepare to sell. Similarly, if the RSI value is below 50, if it enters the "extremely weak" area, it means that it is oversold and should wait for an opportunity to buy.