Today our topic is the law of ground volume stock picking
Ground volume is a form of volume that implies an extreme contraction in volume. It is a relative value because the criteria for ground volume changes with the stock's liquidity.
It is also a floating value, for example, a stock has different average volume levels at various stages, and the ground volume that occurs in a higher level stage may even exceed the highest value in a lower level stage. In other words, ground volume is an indicator that can be quantified, but not precisely.
Let's start by analyzing the phases in which ground volume is likely to occur during the course of a stock's run:
1. The market is weak when the appearance is the most
This stage is the easiest to understand when the stock market is relatively low, the popularity is not enough, and the transaction is very inactive, resulting in small fluctuations in stock prices. In such a market, it is almost difficult to find opportunities to make money arbitrage, so the holders do not want to sell, holders do not want to buy, and then at this time, there will be frequent cases of ground volume. However, this period is often also the time for long-term buyers to enter the market.
2. The market is about to bottom out a lot
After a round of stock speculation, its valuation will be extremely high, according to the principle of value regression, the stock price is bound to fall for a long time, back to its normal valuation area, but due to the law of correction is bound to be too correct, the probability of stock price run will cross the normal valuation area, to the underestimation of the region march. Occasionally, during the long bear journey, there will be a situation where the ground is covered, but it will soon be covered by more selling, so the ground is poorly sustained. However, when the stock price finally bottomed out, the sell-off was sold, did not sell did not want to sell, at this time the ground volume will be frequent, and even continue to appear, and the continuity is very strong. If combined with the general market, if this is also the stage of the bottom of the market, then the accuracy will be greatly improved. If combined with the analysis of the fundamentals of individual stocks, long-term investors to intervene at this stage, as long as they can stand the test of time, generally will be rewarded.
3. The inevitable emergence of shaking the washout
As we said earlier, the Whale in the establishment of the position will experience several shakes in the warehouse stage, to reduce the cost of its holding chips, but also to absorb more low-priced chips. Especially to the pull-up before, to clean the profit plate, reduce the pull-up when the pressure resistance, there will certainly be a stage of repeated shock position, the Whale how to judge whether the shock position is effective? Of course, there are many ways, the amount of ground is one of them and is a more important technical signal. Because the stock has been reluctant to sell at low prices, or even no shares to throw, and hold cash investors, due to a lack of confidence in the direction of the market, but also unwilling to enter the field easily, then the ground volume at this time will inevitably appear, and the continuity of the stronger. At this point, is the time for medium-line investors to enter the field, especially combined with the fundamentals or other technical indicators to comprehensive analysis, then, generally will have a good performance.
4. Pull up before it will appear intermittently
The Whale force due to the operation of large funds, before the real start to pull up, will certainly be repeated on the disc to confirm, it can be said that the Whale force in the test disc, on the one hand, the main force in attracting potential investors, on the other hand, the main force is also in the case of confirming that the disc has been very light, to ensure that in the future when pulling up, do not have to face too much pressure and aggravate the cost of the Whale. That is to say, in the Whale pull up the stock before, to ensure that the disc chips have been locked well, the ground volume is to determine the strength of the chip lock signal. Short-term investors who step in at this time may be able to make a quick profit.
The above signals the appearance of the volume of ground, respectively, in line with the investment habits of three different types of investors in the long and short term. Understanding this, specific operation signals are relatively simple.
Aashish
