Category: Money tips Release Date: 2006-11-30
Broad market or individual stocks in the technical analysis, morphological analysis of the trend is very important to do a job. In general, the price patterns can be simply divided into two types, namely, reversal patterns and continuous forms. Two types of forms have distinct technical meaning, the reversal patterns indicate that the current market trend analysis of the object is or is about to have an important turning point occurred in the trend will change direction; and continuing pattern indicates that the market trend in the current the morphological changes of the process will not change the trend and direction of the original will still be a continuation of the current may only be a temporary break process, before the trend of the phenomenon of overbought or oversold order form by appropriate amendments to be
. Although the two forms of analysis in actual combat operations have a strong value, but investors focused more as a reversal pattern. More types of reversal patterns, mainly including head and shoulders bottom (top), triple or multiple at the end of the end (top), double bottom (top), V-shaped reversal, as well as Yuan Hudi (top), etc. in several forms. Judgments of these reversal patterns that although the standard varies, but it contains a number of common characteristics. Therefore, an accurate judge and master of the reversal of these different forms is required before the first reversal patterns are necessary to understand a few basic points:
The first point is that markets must be in this form clear trend that existed before the Quote. This is a reversal of any form to determine the necessary preconditions. If the analysis object in the form of the trend prior to the more vague, then the form of a reverse form of the less likely. Investors should note that the trend Quotes contains only an upward trend or downward trend in both cases, for finishing the non-directional shock sideways trend reversal patterns in general are not a prerequisite.
The second point is the most important trend line has been broken. In the inverted form of the judge, this is a long time that the previous trend of the formation of a very important upcoming reversal signal. Most of the reversal from the more standard form of point of view, to complete the entire form of the process, will be accompanied by pre-stress lines or support line is effectively a breakthrough phenomenon.
If the form is near completion at the trend lines have yet to be effectively break the case, then the pattern is likely to span a longer time for the collation of Morphological Evolution. Even if the major trend line was broken, but if it is a breakthrough in late, you generally will not immediately after the end of the pattern reversed, more likely, the upward trend of the original to the sideways or downward trend in the pattern change. The emergence of inversion form is sometimes simply is an indication of the end of the previous trend, but does not guarantee the immediate formation of a new trend.
The third point is that if the reversal pattern formed at the bottom position, then there was an upside in the form of a breakthrough in the second half of the required volume accompanied by the gradual amplification. Volume resistance is often a major breakthrough in the time play a key role in volume and price with the more ideal, its reliability will be. Broad market or individual stocks, whether in the form of coming to an end finishing up, reversing trend in the basic shape formation, in most cases will be simultaneous surface or the fundamentals of good policy to support the development of Quotes.
Finally, the reverse pattern span and the greater the volatility, the reversal occurred after the formation of the stock market fluctuation will be. Form span and the volatility of volatility and time by the two factors to distinguish the difference. In general, the future Quotes of the target site and reversal patterns and shape fluctuations of gestation have a direct positive relationship. If the form of longer gestation, volatility larger in scope, its subsequent large-scale trends that may arise based Quotes. (China Securities Research Institute Kai)
Edited in the gold-line
