Trading volume can be said to be the momentum of the stock price. A stock is often falling or consolidating for a long time before a sharp rise, so that when the trading volume shrinks sharply, there is a continuous amplification or a mild increase, and the stock price rises. A bottom trading volume increases. Just like the rocket must have sufficient fuel before it takes off, it must have sufficient bottom momentum to push the stock price to a very high level. Therefore, a skyrocketing stock must appear at the bottom. In the initial stage of the rise, the volume must continue to increase, and the volume and price must be matched.After the main rise, there is often a strong trend of so-called unlimited surge in price increase and decrease.
It can be seen from the actual legend that a stock that will rise sharply must have sufficient bottom momentum to push the stock price higher. The sufficient huge amount mentioned here is relative to the past trace, that is, when a stock After the extreme shrinkage of trading volume, there will be a continuous large volume to push the stock price higher. Volume is a tool to measure buying and selling gas, and it can confirm the direction of the stock price. Therefore, savvy investors have huge transactions at the bottom. The quantity of stocks must be tracked, because when the supply and demand relationship of a stock changes greatly, it will determine the direction of the stock price. Investors must not ignore the relationship between the stock price and the volume when this change occurs. Once the price and volume match, after intervention The stock price will inevitably rise as rapidly as I expected.
Changes in the form of trading volume will be a precursor to a trend reversal. In the early stage of a stock's rise, the relationship between its trading volume and stock price is a small increase in price, and the trading volume continues to increase, and the stock price also rises as the trading volume increases. When entering a strong main uptrend, there may be an immeasurable surge. At the end of the upswing, there will be a divergence trend of volume increase and price decrease, and volume shrinkage and price increase. Once the stock price drops below the 10-day moving average, it shows that the strength has been Changes will enter the stage of mid-term consolidation.
Therefore, when you hold a strong stock, it is best to keep a close eye on the daily K-line chart of the stock price. The daily K-line has always been above the 10-day moving average. You can hold it all the way. The market trend fell below the 10-day moving average, and it should be shipped immediately, and share swap operations should be considered.
Special attention should be paid to stocks that have completed consolidation, because the opportunity is greater than the risk. The final volume of the consolidation is shrinking. It represents the exhaustion of selling power. Basically, volume shrinking is a reversal signal, and volume shrinking can stop falling. , In a downward trend, the volume must gradually shrink to have a chance to rebound. However, after the volume shrinks, it may shrink again. When will the bottom be? Only after the volume shrinks, it is the day when the volume increases to confirm the bottom. If the stock price is already above the ten-day moving average at this time, it will be more confirmation that its rise has begun.
Therefore, basically the angle we should pay attention to is the increase in volume after the volume shrinks.Only the increase in volume can reflect the change in the relationship between supply and demand.Only the increase in trading volume can make the stock have rising bottom momentum.