1. Since the price has fallen below the lower edge of the consolidation zone, it is a bearish trend. The slight drop the next day showed that there was no greater awareness of the decline, and some people were still hesitant, which prevented the price from continuing to fall sharply.
From the perspective of an individual trader, after such a situation occurs, if you have a position, you should consider reducing or clearing it. If you do not hold a position, you can only continue to wait and see for this stock, waiting for the opportunity to enter the market.
It is undeniable that there is still a possibility of reversal, but when this possibility is unlikely, it is not recommended to try to go long, or it is not suitable to consider turning long. Stock decline describes a sharp decline in stocks and the main funds withdrawing from the market.
2. There can be many reasons for stock declines, such as the decline of the entire industry sector, the decline of the entire stock market, unsatisfactory company earnings performance, negative company event news, etc., which will directly or indirectly Resulting in stocks. (1) Market internal factors mainly refer to market supply and demand, that is, the relative proportion of capital and chips. For example, the pace of stock market expansion at a certain stage will become an important part of this factor.
(2) Fundamental factors include macroeconomic factors and internal factors of the company. Macroeconomic factors are mainly factors that can affect stock prices in the market, including economic growth, economic boom cycle, interest rates, fiscal revenue and expenditure, Money supply, prices, balance of payments, etc. Internal factors of the company mainly refer to the company's financial status.
(3) Policy factors refer to major domestic and foreign activities that can affect stock price changes, as well as government policies, measures, decrees and other major events, the government's social and economic development plans, changes in economic policies, and newly promulgated Laws and regulations will affect changes in stock prices. When liquidity tightens, stock markets generally fall. However, such a decline in stocks generally has little impact on the company's core competitiveness and intrinsic value. However, tighter liquidity often heralds rising inflation in the future, which is harmful to all businesses. Buffett detailedly analyzed the impact of inflation on stock investment decades ago in his article "How Inflation Defrauds Stock Investors." Buffett's conclusion is that stocks are actually a kind of "equity bonds" with an intrinsic rate of return of about 12%. When inflation comes, both general bonds and "equity bonds" will be hit.