Island reversal operation strategy Money Tips

Category: Money Tips Date: 2006-09-13

Based on the gap theory, the island-shaped form, is a strong reversal signal, its intensity should be more than break through the gap with the general reversal of form, according to the different position can be divided into reversal and the next on the island-shaped island reversal . On the island-shaped rise in the market after a period of one day suddenly showed up the gap, then the price hovering at high levels and disputes, but soon the form of Youyi gap down both sides of the gap around the same price region, so that high level of regional disputes In the chart it looks like an island, on both sides of the gap to make it an isolated island on the ocean. Sometimes both sides of the gap formed by the "island-shaped" caused by only one trading day, trading volume in the formation of "island reversal" period will be very large. Similarly, when prices fall to form the "island reversal" shape is the same.

The formation of reasons: on the island-shaped, often a bullish stock market, when investors want to buy stocks but they can not buy in anticipation of price, while the gentle rise again so that investors buy high-priced last straw, so rising gap there, but the price did not continue their upward jump, high resistance clearly emerged, after a period of time, after a dispute, the price was finally unable to support at a high level, while a gap of decline, the formation of the "island reversal" began a decline. The next island reversal just the opposite. Island shaped frequently in long-term or medium-term trend appears at the top or bottom. When the increase in the process, after the formation of island-shaped clear, this is a sell flood number; the other hand, if arising in the course down, that is, a buy signal.

Island reversal of the main morphological features:

1. "Island-shaped" is not in itself shift patterns, but graphics are often long-term or medium-term trend appears at the top or bottom.

2. The two gaps in the formation of "island-shaped" could take more than a few weeks can also be as short as a few days, the shortest may be only one trading day, in this case can also be referred to as "single-day reversal." Occur within a short time if a two-day island reversal, often with a typical peak of the K-line combinations, appearing together, such as wearing a head broken legs, the evening star, morning star, etc.; a long time shown with island reversal occur within weeks, often combined with a typical emergence of other forms, such as head and shoulders-shaped dome (bottom), flat top (bottom) and so on. In which the top of the island reversal is usually a relatively flat area, with both sides of the graphics in sharp contrast to the steep, sometimes the top is just one trading day with the amount of days the composition of the market which is a product of extreme emotional. If ST Dajiang (600,695) at June 19, 2003 and 20 formed from the K-line combination of engulfing, and in June 19 has formed a gap up to do, June 23 has formed a downward break gap, accompanied by the typical K-line combinations on the island-shaped reversal.

3. The formation of "island-shaped" two gap mostly in the same paragraph, the price range.

4. "Island-shaped" also may occur in some form, such as "Head and Shoulders," "triangle" or "rectangular" and the formation process as well.

5. "Island reversal" to "do sex gap" beginning, "breakthrough gap" has ended, this case is a gap to fill the gap, the gap has been completely filled.