K-line graphic analysis is an analytical method to predict the future price trend by summarizing the past price evolution law on the price chart. There are two typical forms of price evolution, one is reverse form and the other is continuous form.

Inverted morphology

1. Double top score

Double top is commonly known as m-head figure. Double top is the main potential signal in the graph. The price chart formed when the price rises to the agreed height twice in a certain period of time. The shape of the double roof is like two connected hills, appearing at the top of the price, reflecting the weak market outlook. When the price falls from the top, the turnover usually shrinks. Furthermore, if the price falls below the previous support line (neckline), it will fall faster and the support line will become a resistance line.

According to the legend above, there is an upward trend from point A to point B. When the resistance level is met, the market immediately falls back. After staying at the low level for more than three months, the market situation once again rose to another high point C. However, the market outlook fell rapidly, forming a double-top pattern. This shows that the trend has indeed reversed. If the price falls below the price of point A, it will send a signal to break through the support level.

2. Double bottom

Double bottom is usually called W bottom. It is a trend chart formed when the price falls to the agreed low point twice in a certain period of time. When there is a double bottom, it is usually reflected in the downward movement of the market from a bear market to a bull market. Once the double bottom form is formed, we must pay attention to whether the form clearly breaks through the resistance line. If you break through the resistance line, it shows that demand is strong. Turnover usually increases significantly due to callback. Double bottom can also use the cash flow index and volume balance index (OBV) in technical analysis indicators to analyze the transaction intensity. If the price breaks through the resistance line, then the resistance line becomes the support line.

3. Three-story roof

Triple top is also called triple head. It is a trend chart form formed by three high positions, which usually appears in the rising market. The typical triple roof usually appears in a short time and is formed by breaking through the support line. Another signal to confirm the triple top can be found in the total transaction volume. When the figure is formed, the volume immediately decreases, and when the price rises to the third high level again, the volume begins to enlarge, forming a signal to confirm the triple top.

The formation of the lowest point, investors usually take it as the main support line. When the price has a double top, it falls back to the neckline (support level), then rebounds to the original double top position again, and falls back after encountering resistance. If the price falls below the neckline, it will drop sharply, and the triple top figure has been confirmed.

The above example shows that when the price rose to point A, the transaction lingered in this area for more than a month, but it still failed to break through the resistance levels of points B and C. Because there was no need, the price began to fall back, falling below the support level of the triple top chart and confirming the trend chart. Then rise back to this price and try to break through the resistance level formed by this figure (the support level of the previous market).

4. triple bottom

Triple bottom is a reflection of the triple-top pattern, which was formed at the low point where three points meet in the market crash. When the price fluctuates upwards, it sends an important turning signal. Compared with the triple roof, it usually takes several months for triple bottom shape to be recognized as triple bottom shape after breaking through the resistance line. Another way to confirm the triple bottom signal can be found in the volume. In the process of drawing, the trading volume will decrease until the price rises to the third low again, and the trading volume will begin to enlarge, forming a signal to confirm triple bottom.

The formation of the highest point is usually regarded by investors as the main resistance line. After a double bottom, the price rises to close to the neckline, and the resistance falls back to the support level of the double bottom. The price failed to fall below the support level, and at that time, the volume plummeted and began to rebound, and the volume immediately increased. When the price rose above the neckline, the turnover surged. After the price breaks through the neckline, the triple bottom figure has been confirmed.

The above example shows that when the price fell to point A, the transaction lingered in this area for about four months, but failed to break through the support levels of point B and point C. Due to oversupply, the price began to rise to some high levels in the previous market. The resistance level of Triple bottom (that is, the high line in the above picture) is the resistance level again. Triple bottom form was thus confirmed. After moving back and forth to a new support level (that is, the resistance level of the previous market), it failed to turn into a bull market, which can enhance the power of triple bottom graphics.

5. Top of the head and shoulders

head &； Shoulder top) is one of the most common inverted morphological diagrams. Head and shoulders follow the rising market trend, indicating the reversal of market conditions. As the name implies, the figure consists of left shoulder, head, right shoulder and neckline. When three consecutive prices form the left shoulder, its turnover must be the largest, followed by the head, and the right shoulder is thinner.

Once the price falls below the support line (neckline), there will be a sharp and sharp decline. Volume can be used as an important index of head and shoulder shape. In most cases, the increase of the left shoulder must be higher than that of the right shoulder. The falling volume combined with head innovation can be used as a warning signal to warn the market situation to reverse at the horizontal level.

The second warning signal is that when the price falls from the highest point of the head, it crosses the high point of the right shoulder. The final reversal signal is that after the price falls below the neckline, there will be a "retreat" phenomenon. After the price touches the neckline, it will be sold immediately without a breakthrough.

In most graphics, when the support line is worn out, the same support line becomes a resistance line in the afternoon.

6. Head and shoulders

Head and shoulders (head &; The bottom of the shoulder) follows the declining market trend and signals the reversal of the market situation. As the name implies, the figure consists of left shoulder, head, right shoulder and neckline. The middle valley bottom (head) is the deepest of the three consecutive valleys, and the first and last valleys (left shoulder and right shoulder respectively) are shallow and close to symmetry, thus forming a head-shoulder-bottom shape. Once the price rises above the resistance line (neckline), it will rise sharply.

Volume can be used as an important index of head, shoulder and bottom shape. In most cases, the left shoulder is larger than the right shoulder and head. Falling trading volume and innovation can be used as a warning signal to warn the market to reverse on the horizontal line.

The second warning signal is that when the price rises from the top of the head, that is, after the price breaks through the neckline, it falls back to the neckline support level again and then rises sharply. The final reversal signal is to seize the opportunity to enter the market after the price window breaks through the neckline. If it fails to follow up, it is expected that there will be a "draw back" buy when testing the neckline support level.

In most figures, when the resistance line is broken, the same resistance line becomes the support line in the afternoon.

In the legend above, the point A on the left shoulder is formed in a market that is falling and consolidating. After the neckline is formed from point A, it falls back for about a month to form the head. Then the price began to rebound and fell back again at point B, forming the right shoulder. Until the second point of the neckline appears and becomes the resistance line (that is, point B). Later, due to a large number of transactions, the price rose and broke through the resistance level (neckline), and the head, shoulder and bottom figures were confirmed. After breaking through the neckline, there may be cases of withdrawing orders. If it does not fall below the neckline, the market will rise towards the target range.

From the above example, we know that investors may not immediately follow the stocks that have fallen below the neckline. Usually, the price will fall back to the support level (such as point C) again, giving investors another buying opportunity.

7. Rising wedge

The rising wedge occurred when the market plunged, and then rose, and the transaction price narrowed all the way. Rising wedge can be divided into continuous graphs or reverse graphs. In the continuous chart, rising wedge tends to tilt upward until it encounters the current downward trend. The reversal pattern will also tilt upwards, but the transaction will rise with the trend. No matter what kind of number, this number is regarded as bearish.

Rising wedge usually delays for three to six months and can give investors a warning that the market is improving. The formation of rising wedge has at least two high points, with the highest point of each point and the previous highest point as the highest resistance line; Similarly, at least two low points, the lowest point of each point and the previous low point are connected into a minimum support line. In rising wedge, when the price rises, the selling pressure is not great, but the interest of investors gradually decreases. Although the price has risen, each new fluctuation is weaker than the previous one. Finally, when the demand completely disappeared, the price reversed and fell back. Therefore, the technical significance of Rising Wedge Theory is gradually weakening. When its lower limit falls below, it is a sell signal.

The picture above is an example of rising wedge. Prices began to fall slowly in mid-July, hitting new lows at point A and point B respectively, forming new highs. But the relative strength index (RSI) shows that the increase from point A to point B is opposite. When the current diagonal meets the price, the upward trend is not strong enough to push the price up, and the price immediately falls below the support line C, so the downward trend continues.

8. Falling wedge

Falling wedge is a common form at the top of rising prices. During the consolidation period when the price fluctuates slightly, the falling wedge can be divided into two types: continuous graph and reverse graph.

In the continuous chart, falling wedge leans downward until it meets the current upward trend. On the other hand, the reversal pattern is also inclined downward, but the transaction is declining. Regardless of the type, this figure is considered to be promising.

A falling wedge usually delays three to six months and can provide investors with a warning that the market is improving. The formation of a falling wedge has at least two high points, with the highest point of each point and the previous highest point as the highest resistance line; Similarly, at least two low points, the lowest point of each point and the previous low point are connected into a minimum support line.

After the price rose for a period of time, there was profit taking. Although the bottom line of the downward wedge is inclined downward, it seems that the market is not strong, but the new wave of decline is smaller than the previous wave, indicating that the selling power is weakening, and the decrease in trading volume at this stage can prove the weakening of the selling pressure in the market.

In the falling wedge, when the price rises, the selling pressure is not great, but the interest of investors gradually decreases. Although the price has risen, each new fluctuation is weaker than the previous one. Finally, when the demand completely disappeared, the price reversed and fell back. Therefore, the technical significance of falling wedge theory is gradually weakening. When its lower limit falls below, it is a sell signal. The appearance of the falling wedge tells us that the market rise has not peaked, which is just a normal adjustment phenomenon after the rise. Generally speaking, most forms are upward breakthroughs, and when the upper limit resistance breaks through, it is a buy signal.

The above picture is an example of a falling wedge. The price has been falling, and point A and point B correspond to new highs, forming two new lows respectively. However, the moving average deviation indicator (MACD) shows that the decline between point A and point B shows the bottom deviation. When the current diagonal meets the price, the downward trend is not strong enough to push the price down, and the price immediately rises above the resistance level at point C, so the upward trend continues.

9. Round bottom

The round bottom, also known as saucer or bowl, is a reverse shape, but it is not common. Most of these forms appear in the long consolidation period from bear market to bull market. But in our example, we take the short-term consolidation period as an example.

The round bottom often appears after a long-term decline, and the low position usually records a new low and rebounds. The shape of the round bottom can be divided into three parts: descending, lowest and ascending.

The first part of the form is descending: that is, guiding the circle to a low position. The slope of the downhill slope will not be too great. The second part is the lowest position of the arc bottom, similar to the sharp bottom, but not too sharp. This part usually appears for a long time or the increase can reach one month. Finally, the rising part, generally behind the figure, is almost at the same time as the falling place. The rising part rises too fast, which will destroy the overall shape and become a false signal.

Looking at the whole graph, if the price does not break through the resistance level, it is the falling position at the beginning of the graph; The round bottom has not been confirmed. Volume usually follows a round bottom pattern: the highest position is the beginning of the decline, the lowest position is the end of the decline, and the increase becomes stronger.

persistent form

1. Cup handle shape

The shape of the cup handle is an ascending shape, and the finishing time is formed with the breakthrough of the upper channel. The shape of the cup handle can be divided into two parts: the cup and the cup handle. When the price rises within a certain period of time, a cup is formed. Its shape is like a bowl or a round bottom, and it is also like a U-shape. Because the U-shape is flatter than the V-shape, the cup shape can definitely be the ending shape with strong support at the bottom.

When the cup is formed, the short-term transaction is the evolution period of the cup handle. It breaks through the range of the cup handle and provides a strong upward trend signal. Usually, the shorter the callback of the cup handle, the more it forms an upward trend and the breakthrough is strengthened. When the breakthrough appeared, the volume of transactions increased significantly.

Take the above as an example. Before the resistance level is met at point A, the price goes up. In less than six months, the shape of the cup has been formed. When it meets resistance point B, the price hovers around the same transaction price for about a month, and then it breaks through the resistance level and confirms the shape of the cup handle. Volume also provides a clear indicator to confirm the accuracy of this chart. Because the turnover increased before and after the break, it represented a large number of buyers.

2 flag shape

The flag shape is like a flag hanging on the top of the flag, which usually appears in the rapid and large market fluctuations. After a series of close short-term fluctuations, the price forms a rectangle slightly inclined in the opposite direction to the original trend, which is the flag trend. Flag-shaped trends are divided into flag raising and flag lowering.

When the price rises sharply, it forms a dense, narrow and slightly downward-sloping price-intensive area. By connecting the high points and low points of this dense area respectively, two parallel and downward inclined straight lines can be drawn, which is the flag-raising shape. When the price drops rapidly or vertically, a price-intensive area with tight fluctuation and slight upward inclination is formed, like an ascending channel, which is the flag shape of falling.

After the completion of the form, the price will continue to move to the original trend, and the upper flag shape will break upward and the lower flag shape will fall below. Most flag-raising patterns appear at the end of the bull market, suggesting that the market rise may enter the end stage; However, most of the falling flags appear in the early stage of the bear market, which indicates that the market may fall vertically, so the flag formed is very small and has been completed in about three or four trading days. However, if it appears at the end of the bear market, it will take a long time to form, and it can only make a limited decline after falling below. The wedge flag consists of two straight lines that move in the same direction and converge, and these two straight lines form a flat triangle in a short time. Wedge usually appears in the center of an upward trend or a downward trend, that is, the mid-term consolidation in the upward trend and the rebound escape wave in the downward trend, while most of the trading volume gradually decreases during the consolidation process, and the trading volume can be significantly enlarged after the breakthrough or breakthrough.

In the upward trend, the wedge flag inclines from the upper left to the lower right; In the downward trend, it inclines from the lower left to the upper right, and its shape is similar to a flag, quite like a flag hanging at the stern.

The picture above is an example of a wedge-shaped flag. In a rising market, the flag was formed here because of a large number of transactions at point A. After several weeks of consolidation, the price tried to rise at the top of the wedge flag (that is, point B). When the resistance level is broken, coupled with the increase of trading volume, the form confirmation and upward trend will continue.

3 symmetrical triangle

Symmetrical triangle is also called an equilateral triangle. Generally speaking, symmetrical triangle belongs to the arrangement pattern, that is, the price will continue to move in the original trend. It consists of a series of price changes, and the range of changes is gradually narrowing, that is, the highest price of each change is lower than the previous level, while the lowest price is higher than the previous lowest price level, showing a compressed graph. If you look at the price fluctuation field from the horizontal direction, the upper limit is a downward diagonal line and the lower limit is an upward diagonal line. A symmetrical triangle can be formed by connecting short-term high points and low points with straight lines.

Symmetrical triangle's trading volume is decreasing due to smaller and smaller price changes, which reflects the hesitant attitude of long and short forces towards the market outlook, and then when the price suddenly jumps out of the triangle, the trading volume will increase accordingly.

If the price breaks through the resistance line (there must be a large volume of cooperation), it is a short-term buying signal; Conversely, if the price falls below (below the low volume), it is a short-term selling signal.

Take the above figure as an example, the downward trend appears when the price flows into symmetrical triangle from point A, and the transaction hovers in this region. Trend lines also appeared in the following two months (point A to point C, point B to point D). At point E, the price began to break through the resistance line, trying to turn the tide, but without success, it became a false breakthrough. This is a good example, which can remind investors to wait for the signal after the market closes and pay attention to whether the broken position is accurate. At point E, the price opens below the trend line, confirming that the previous signal is false. Subsequently, the price broke through the lower point of the triangle and sold in large quantities, which confirmed that the downward trend in symmetrical triangle continued.

4 rising triangle

The rising triangle usually approaches the horizontal line at the high point of recovery and the low point of loop, and gradually rises, thus forming an upward inclined diagonal. At the end of the sorting form, with the expansion of attack energy, there is generally a greater chance of upward breakthrough.

The price shows strong selling pressure at a certain level, and then falls back when it rises from a low point to a certain level. However, the purchasing power of the market is still very strong, and the price rebounded immediately before returning to the last low point, and the price kept narrowing with the fluctuation of the resistance line. If we connect each short-term fluctuation high point, we can draw a resistance line; And each short-term fluctuation low point can be connected with another upward diagonal line to form an upward triangle. In the process of formation, the transaction volume is decreasing.

The rising triangle shows the contest between buyers and sellers in this range, but the strength of the buyer has a slight advantage in the struggle. The seller keeps selling at its specific price, is not in a hurry to ship, but is not optimistic about the market outlook, so every time the price rises to the ideal selling price, it will sell, thus forming a horizontal supply line with the same price. However, the purchasing power of the market is very strong, and they can't wait for the price to fall back to the last low point, so they can't wait to buy, thus forming a demand line inclined to the upper right.

Take the above picture as an example. When the rising triangle was just formed, the price began to rise. The whole pattern occurred within three months, but it did not break through the resistance lines of B, C and E. The higher lows A to D to F represent accumulation, and the market will continue to rise. In the whole process, the trading volume was weaker than expected, but it began to chase up at point F, and the price was just subject to the support line. Then it rebounded above the resistance point G, and the trading volume at point G was very large. After the confirmation of the rising triangle shape, the market will continue to rise.

5 descending triangle

A descending triangle is usually close to the horizontal line at the low point of retracement, while the line at the high point is inclined downward, which means that the seller's power in the market is gradually increasing, so that the price of the high point is getting lower and lower with time, while the buying supported by the lower stalls is gradually weakening, and the selling pressure of retreating and waiting is gradually increasing. When the buying power is weakening and the selling pressure is gradually increasing, the matching amount can be moderately enlarged at the end of the session, and the price is more likely to fall below.

The shape of the falling triangle is just the opposite of the rising triangle. The price has a stable purchasing power at a certain level, so it will rise every time it falls back to that level, forming a horizontal demand line. However, the selling power of the market is constantly strengthening, and the high point of price fluctuation is lower than the previous one, thus forming a downward inclined supply line.

The descending triangle is also the performance of the contest between the long and short sides, but the strength of the long and short sides is opposite to that shown in the ascending triangle table.

Take the above picture as an example. As soon as the falling triangle was formed, the price began to fall. The whole form took place within four months, but it did not break through the points A, C and E of the support line. The bottom highs are at points B, D and F, indicating that the market situation is being distributed and bearish. In the process of forming the descending triangle, the trading volume was weaker than expected, but it began to catch up at point F, and the resistance line was also strong. In the end, the resistance failed, and the price immediately adjusted back, falling below the support level of G-point, and the turnover of G-point was also high. After the confirmation of the triangle shape, the market trend continued to fall.

6 price channel

The price channel is a continuous graph, and its inclination tends to be upward or downward, depending on whether its price trading is concentrated on the upper trend line or the lower trend line. The upper trend line is the resistance line and the lower trend line is the support line. When the price channel inclines downward, it is regarded as falling, and when the price channel inclines upward, it is regarded as rising.

A price channel formed by two trend lines, one is called the main trend line and the other is called the channel line. The main trend line determines the strength. If the ascending (descending) passage is inclined upward (downward), at least draw the low point (high point) of two points as a line.

The other trend line is called the channel line, which is in balance with the main trend line. Channel lines are drawn with high points and low points. When ascending the passage, the passage line is the resistance (support line). When descending the passage, the passage line is the support line.

When prices continue to rise and fluctuate in the channel, the trend can be regarded as a bull market. When the price fails to reach the channel line (resistance line), it can be expected that when the main trend line (support line) is subsequently broken, the trend will change urgently, which can provide confirmation that the market situation will reverse. On the contrary, when crossing the channel line, it can be regarded as a bull market and implies that prices will continue to rise.

According to the above legend, when the price leaves the upward trend, an upward channel begins to form. During the whole price increase period, the transaction cannot break through the resistance line (channel line) of point A, point C and point E. Even if the price breaks through the support line formed by point B and point D, the upward trajectory still exists, because the high position and the low position are gradually rising. But in the end, point F broke through the support line because there were too many sales orders. In fact, when the price before point F does not reach the channel line, an early warning signal is issued, indicating that the purchasing power is insufficient. Conversely, as prices continue to fall or fluctuate in the channel, the trend is regarded as weakening. When the price is closer to the channel line (or support line), it means that the trend will change. If the resistance line is broken, it means that the current trend will change. If you break through the lower channel, it means weakness and continue to fall.

In the above legend, when the price breaks away from the downward trend, the downward channel begins to form. During the whole period of price decline, the transaction cannot break through the support level (or channel line) of point A and point C. Even if the price breaks through the resistance line formed by point B and point D, the downward trajectory still exists, because the high position and the low position fall. Although point F broke through the resistance, it really turned into an upward trend when it broke through point G. When the price did not extend to the channel line, point E had already issued an early warning signal to turn around, indicating that the price continued to be under selling pressure.

7 rectangle

Rectangular, also called box, is also a typical finishing form. When the price rose to a certain level, it met with resistance and turned back, but it was quickly supported and rebounded. But the last time it rose to the same high point, it was blocked, and it was supported when it fell to the last low point. These short-term highs and lows are connected by straight lines respectively, and a channel can be drawn, which is neither upward nor downward, but develops in parallel, that is, in the form of a rectangle.

Generally speaking, when the market cowhide rises and falls, both rising and falling prices may appear, and the original bottom often has a narrow rectangle with a small volume. After breaking the upper and lower limits, there are buying and selling signals, and the fluctuation amplitude is usually equal to the width of the rectangle itself. When it breaks through the upper resistance, it is a "buy signal". On the other hand, if it falls below, it is a "sell signal". In the process of rectangle formation, unless there is sudden message interference, its transaction volume should be decreasing continuously. If there are irregular high-level transactions during the formation of the form, the form may be invalid. When the price exceeds the rectangular upper limit, there will inevitably be a surge in trading volume; However, if it falls below the lower limit level, there is no need to increase the high volume.

The rectangle shows that after the breakthrough, the price tends to rebound, usually within three days to three weeks after the breakthrough. Back pumping will stop at the top line level, and the false recovery after falling below the bottom line level will be blocked.

According to the above legend, in early May, rectangular figures began to form in the falling market. It seems that the market has bottomed out and the turnover is very small. Until the beginning of July, the transaction volume began to increase, which clearly showed that the price breakthrough was imminent and the trend continued to decline.

8. Magnification and anti-deformation (trumpet type)

After a period of rising, the stock price fell, then rose and then fell. The rising high point is higher than last time, and the falling low point is lower than last time. The whole pattern starts with a narrow fluctuation, and then spreads up and down. If you connect the upper and lower high points and low points respectively, you can draw a triangle reflected in the mirror, which is a trumpet.

Judging from the transaction volume, trumpet-shaped has maintained a high and irregular transaction throughout its formation. Horn type is divided into ascending type and descending type, which have the same meaning.

A standard horn should have three high points and two low points. These three highs are higher than one, and the middle two lows are lower than one; When the stock price falls from the third high point and its falling low point is lower than the previous low point, it can be considered that this form is established. Like the top of the head and shoulders, the horn type belongs to the "five-point steering" type, so the gentle horn type can also be regarded as the head-shoulder type trend with high right shoulder and downward sloping neckline.

Horn type is caused by investors' impulse and irrational emotions, so it rarely appears at the bottom of the falling market. The reason is that the stock price is weak after a period of decline, and it is impossible to form this type in the case of a depressed market atmosphere.

9 island type

After the stock market continued to rise for a period of time, one day it suddenly rose with a gap, then the stock price hovered at a high level, and soon the price fell again. The gap between the two sides occurs in the same price area, which makes the high-rise contention area look like an island on the chart, and the gap between the two sides makes the island hang alone in the ocean. In the process of island formation, the transaction volume is very huge. The same is true of the island formed when the stock price falls.

(1) The gap before the island is a consumable gap, and the gap after moving in the opposite direction is a breakthrough gap.

(2) These two gaps appear one after another in a short time, and the shortest time may be only one trading day, or it may last for several days to several weeks.

(3) Most of the two gaps that form an island are within the price range of the same presentation plate.

(4) The island type begins with a consumable gap and ends with a breakthrough gap. In this case, the gap is filled with a gap, so the gap has been completely filled.

Formal meaning: the stock price keeps rising, so that people who originally wanted to buy can't catch up with the expected price. The continuous upward trend makes it impossible for them to rush in without pricing, thus forming an upward gap. However, the stock price did not continue to rise because of such a jump, and there was obviously resistance at a high level. After a short struggle, the stock price finally failed to support at a high level and fell with a gap. The stock price keeps falling, and finally the island shape is the same as when it rose.

Island morphology usually appears at the top or bottom of long-term or medium-term trends. When rising, after the island form is obviously formed, it is a signal to sell floods; On the contrary, if this pattern appears when it falls, it is a buying signal.

10 diamond

The diamond is like a diamond, and its neckline is V-shaped. The turnover is like a triangle, which gradually decreases. The diamond is actually a combination of trumpet and symmetrical triangle. The left half is the same as the trumpet, and the second rising point is higher than the previous one.

The highs and lows are also lower than the previous one. When it rose for the third time, the high point did not rise above the second high point, and then the falling point was higher than the previous one. The fluctuation of stock price has changed from spreading outward to narrowing inward, and the change in the right half is similar to a symmetrical triangle.

Morphological significance: when the stock price rises higher and higher, investors are impulsive and irrational, so the price fluctuation increases and the number of transactions increases greatly. But soon, the investment sentiment gradually calmed down, the number of transactions decreased, the fluctuation of stock price narrowed, the market changed from high investment willingness to wait and see, and investors waited for further changes in the market before making a decision.

The (1) diamond rarely reverses at the bottom, but usually appears at the top before the mid-term decline or at the apex of a large number of transactions, which is a turning shape.

(2) When the lower right support level of the diamond falls below, it is a selling signal; However, if the stock price breaks through the resistance on the right side and the volume surges, it is a buying signal.

(3) The method to measure the minimum decline is to measure the vertical distance between the highest point and the lowest point in the graph from the moment when the stock price falls below the right lower line of the diamond, which is the minimum decline of the stock price in the future.

Support line and resistance line

1 Definition of support line and resistance line

Support line: refers to the horizontal line or rising line composed of two opposite low points on the graph. The support line plays a role in preventing the price from falling further. When the price fell to the support line, many parties began to try to buy light positions, while the empty side was cautious, always paying attention to closing positions and ensuring profitability. Prices began to stop falling and pick up near the support line. According to the distance and time of the two support points, the support line can be divided into long-term support line and short-term support line. The supporting function of long-term support line is greater than that of short-term support line.

Resistance line: refers to the horizontal line or rising straight line composed of two relatively high points on the graph. The resistance line plays a role in preventing the price from rising further. When the price rose to the vicinity of the resistance line, the empty side began to try to buy in a light warehouse, and many parties paid attention to closing the position to ensure profitability. Prices began to stop rising and fall near the resistance line. According to the distance and time of two resistance points, the resistance line can be divided into long-term resistance line and short-term resistance line. The resistance of long-term resistance line is greater than that of short-term resistance line.

2 conversion principle of trend line

According to the technical analysis theory, the support line and the resistance line can be transformed into each other. After breaking through the resistance line, the resistance line is transformed into a support line; Similarly, after breaking through the support line, the support line is transformed into a resistance line.

This is in line with the principle of extremes meet. At the same time, it also conforms to people's psychology and actual situation. People are resisting.

Ordinary shorting near the line, although this has suppressed the price increase to a certain extent, once the resistance line is

A limited breakthrough means that all short investors have misjudged, and a large number of investors have to stop loss or

There are more people. On the contrary, the resistance line as a critical point or edge is transformed into a support line. inherent

The short-selling power suddenly became the long-selling power. Example:

As shown in the figure, after the support line drawn from point A is effectively broken through at point C, it is transformed into a resistance line at point E, which limits the rise of the exchange rate. The resistance line drawn from point B effectively broke through point G, and then turned into a support line at point H, effectively suppressing the decline of the exchange rate. After the support line drawn from point D effectively broke through point F, a resistance line was formed above point G, which effectively suppressed the rise of the exchange rate.