The bottom W of a stock, also known as the double bottom, is a bottom morphological chart, indicating that the stock has been supported after two consecutive declines, and the stock price will not continue to fall, and there may be a rising market.
Characteristics of w bottom:
1, the low point of the stock price falling twice in a row is basically on the same parallel line, which can be used as the support point of the recent stock price.
2. In the process of bottom W, the stock price changes in the same direction as the position, that is, the stock price rises and the position increases; The stock price fell and the position decreased.
3. There is a huge volume when the neckline is broken, and the volume of the first low point is greater than that of the second low point. In the process of the bottom of W, investors can sell high and suck low, that is, when the stock price falls to the first low point and rebounds, investors can buy, and when the stock price falls again due to the suppression of the neckline, investors can throw out their stocks; When the stock price breaks through the upper neckline, investors can consider opening or adding positions with a large turnover.
The stock has been falling for a long time, so don't be afraid at this time. Don't throw it as a precursor to the stock's rise. The market plummeted and all stocks fell irrationally. Don't sell stocks in a hurry at this time, let alone sell all stocks in a hurry. Those stocks that are technically at a high level are another matter. The stock market is on the rise. After the stock rose to a certain degree of influence, there was a relatively high level of sideways consolidation. Many people can think that the stock price has peaked and will be thrown out in a hurry. In fact, it is only the repair of technical form, which often forms a rising relay.
The stock price trend is stable. The stock price is steadily attached to the 5-day moving average and the 10 moving average, and the volume and price are moderately matched. Don't take it for granted that the stock price can't go up. At this time, you should be patient in holding shares and let your profits grow fully. Similarly, the short-term rise is too fast, and the rapid price rise drives the 5-day moving average to move up quickly, forming a large opening area between the 5-day moving average and the 10 moving average. Buying at this time will also lead to the phenomenon of falling as soon as you buy it. Avoid operating varieties that have increased too much in the early stage, because operating such varieties is easy for novices to make big directional mistakes, which is the most harmful. For stocks that have risen too much, novices should stop being nostalgic and greedy. The stock fell sharply in the short term, and the price was far from the moving average, which formed a relatively large opening space in the middle. At this time, although the form is very bad, we must hold back and rebound at any time. Don't kill the low post.
Similarly, the stock began to go down the channel, and after reaching a certain decline, it began to consolidate within a certain price range. Don't think that the stock price has fallen to the end, which is often a relay of decline! The neckline of "breaking through the neckline" plays a vital role in the struggle between long and short sides. Whether it is a reversal form or a finishing form, the effective breakthrough of the neckline is the basis for judging the trend of the market outlook. If the stock price wants to continue to rise, it must effectively break through the neckline. In order to verify the effectiveness of the breakthrough, the action of stepping back on the neckline support often appears after the breakthrough. Whether it is a breakthrough or stepping back on the neckline, it often breeds short-term investment opportunities.
The importance of neckline is a visual statement of the key position of price fluctuation trend line in technical analysis of stock market. Taking the shape of head and shoulder bottom as an example, the connecting line between the left shoulder high point and the right shoulder high point extends to the left and right, forming a flat line. The neckline is important because it is the dividing line between the long side and the short side. When the stock price rises, if it can effectively break through the neckline, it means that the bulls occupy the power and the stock price will attack along the inertia; On the other hand, when the stock price falls, if the bears break through the neckline, it means that the bulls are fleeing and the stock price enters a downward stage. The neckline plays a vital role in the struggle between long and short sides, so it is also called the "lifeline" of the stock market.