The stock price rises from the bottom and falls again, so that it keeps going up and down several times, which is commonly known as “bottoming”. Also known as “building the bottom”.
When the stock price goes down for a long time, the market energy of short-selling is basically released, that is to say, the downward momentum basically disappears. At this time, the multi-short market forces basically reach a relative balance. Accompanied by the characteristics of the market is the extreme decline in turnover, resulting in the volume of land. Under such a relatively stable market background, stocks already have the market opportunity for strategic warehousing. As an investor, we should form a new stock selection idea according to the new situation in the construction market road:
There are two ways to buy in the case of bottoming:
One is to buy at a low price when the stock price is stable after the bottom-building figure appears.
The second is to actively buy before the closing date of the day when the bottoming figure appears.
Compared with the two methods of operation, the stock price is bought after the average, although there is a certain price difference from the bottom price at this time, but the upward trend has been clear, the rising trend has just begun, it is still a good opportunity to buy. And the stock price is only bought on the average line, the biggest advantage is that it can follow up in the early stage of the rising market without short-selling. On the other hand, when the judgment is wrong, when the stock price does not rise or fall, there is also the average line as a clear stop-loss point, and the loss will not be too big.
Stock prices breaking through the average upward should be matched by increased turnover, otherwise it may be a rebound in the middle of the decline, and will soon fall back below the average.
Bottom-building rebound strategy is often based on an average as an important support level. When the stock price returns to an important support level, the main force will take protective action to stop the decline of the stock price, and then the main force will try to test the extent of the catch-up by pulling up the stock price slightly. At this time, investors are often out of the market because they are eager to solve the trap or cut meat to reduce losses, so they just fall into the trap of the bankers.
In practice, investors should pay attention to the following points:
(1) When the stock price has reached a new low or stabilized in the early trading intensive area, investors should build a quarter position during the cross-market period when the stock price rises above the 21-day average, so long as the stock price does not break the 21-day average support, they can boldly hold shares.
(2) When the stock price relies on the 21-day average crossing and breaks upward, the relative regional volume begins to increase. Investors should make up positions in time. If the stock price attacks the 144-day average, investors should exit in time.
(3) Volume must shrink dramatically after the stock price returns to the 144-day average, reflecting that the main force is not out, otherwise it will not intervene. If the stock price rises above the 21-day average again, investors should replenish their chips in time, because the stock price is about to enter the pull-up stage.
Stock selection
The reason is called bottoming stage, from a certain point of view, the operation of funds in the market is not much, most of the outlook of the capital market, occasionally appear in the individual stock market, must be small-cap stocks. At the same time, in the future, once the end of the bottoming began to pick up, off-the-counter funds returned to grab the market, usually small-cap stocks. Because, in a market with less capital in general, smaller tradables are always more attractive than large-cap stocks.

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