"bell mouth" form
Diffusion pattern refers to the increasingly fierce price fluctuation in a certain price range, which leads to the formation of trumpet.
The market background of this form is that the mentality of market participants is very chaotic, and there is a lack of restriction between long and short positions, which leads to no resistance from the defender when the attacker attacks, and the price immediately turns sharply after the attack is weak, and the fluctuation range is stronger.
Generally speaking, the bell mouth is inverted, but it is also common to see the bell mouth in the middle of adjustment. It is not a clever way to judge whether the price has reversed by simple form, so don't rush to judge that the price has reversed when you see the bell mouth. The appearance of bell mouth can only show that the market is in an impatient state, and finally the price will choose its own real direction.
DJ Jane said that when the stock price or index moves to a relatively low level or a relatively high level, especially after the ex-rights, it often appears a "trumpet" shape, which he called "trumpet" shape. However, due to the considerable ups and downs after the formation of its bell mouth, this form is vividly called "lion roar".
The bell mouth is a transitional form of market changes. It is a form of up-and-down diffusion formed by the continuous upward movement of stock prices and index highs and downward movement of lows. In its diffusion process, the cooperation of volume is particularly important, which is a process from volume to shrinkage and then to volume. When the bell is formed at a relatively low level, with the continuous enlargement of trading volume, the daily average is 135, and the market outlook is bullish. On the other hand, if the bell mouth is formed at a relatively high level, and the trading volume does not meet the moving average 135 with the gradual shrinkage of trading volume, then the market outlook will generally decline greatly.