Lightyear FX: Financial Analyst, Financial Media Person, Amateur Research Trading Technical Analysis. Stay on top of the latest cutting-edge technology information and share the most in-depth industry insights with you. The following content is from Just2Trade.
1. How to choose potential stocks
1. High concentration of chips
There is generally a shadow of the main force behind the super bull stocks, and the degree to which the main force controls the chips directly determines its ability to manipulate the stock price.
2. The trend is independent and the resistance is strong
1) Blue chips
Under normal circumstances, even when the market is in a bear market and the market is in a sharp decline, blue chips can often show strong resistance to declines, and sometimes even can replace the decline with consolidation, and when the market turns around or enters a bull market, its stock price begins to soar.
In the process of stock market investment, if you want to find a blue chip stock with resistance to decline, the easier way is to observe the K-line chart and find the stocks that replace the decline with horizontal consolidation.
2) Monopoly industry leading stocks
From the perspective of the industry, energy, transportation, communications and other industries, due to the scarcity of industry resources, and by the national policy support, its development cycle is naturally relatively stable, generally not affected by market competition or the overall economic situation, usually the stock price will not fall sharply, and when the economic situation improves, such enterprises have a good fundamental support, their performance compared with other industries also have a faster growth rate. Therefore, the leading stocks in this category have become an ideal safe haven in a bear market.
3) Low P/E stocks
Usually if a stock has a relatively low P/E ratio, it means that the investment value of the stock is relatively high, when the P/E ratio of the stock reaches less than 20 times, new investors should pay more attention to the stock. Compared with stocks with low P/E ratios, stocks with high P/E ratios are often able to get out of a wave of rising market in a bull market driven by the main force due to the impact of market news and small share capital, but if the general trend is a bear market, then such high P/E ratio stocks are also the primary target of the main force to abandon.
3. The rally lasts for a long time
1) The medium and long-term main force prefers stocks with a relatively high shareholding ratio of the top ten shareholders and good chip locking
Listed companies maintain long-term, stable and sustainable development, with growing performance as the foundation, large capital operation is not easy to be affected by fundamentals;
Only when the listed company has good performance and stable development will the major shareholders be willing to hold large amounts for a long time. Correspondingly, with strong shareholders, the development space of listed companies is also guaranteed.
2) Big bull stocks can also be found with the help of technical graphics
When choosing a stock that will be held for a long time, it is necessary to pay attention to whether the net profit of the listed company to which it belongs can maintain a stable upward trend in 3-5 years and whether it has high growth. Only listed companies with the above conditions have greater investment value, once this kind of stock is locked, then as long as you choose the right time to buy.
4. The stock price continues to reach new highs
1) Excellent performance support
The main reason for the future trend of a stock is the contribution of the company's main revenue to the growth rate of the company's net profit and earnings per share. The level of performance of a company can be studied by constantly observing the financial data published in each period.
2) A better industry business cycle
In China's stock market, each industry has its own unique business cycle, some industries may have a long business cycle, while others will have a very short business cycle. The industry in which the listed company is located is in a good industry cycle, so the continuous inflow of funds into it will continue to promote the stock price higher.
3) Large institutions mainly hold heavy holdings
When a large institution holds a stock in a heavy position, it shows that the mainstream funds in the market have a positive attitude towards the future development of the stock, and the development space of the future market is broader. You can make a rough judgment by looking at the positions of the top ten circulating shareholders of listed companies and analyzing the strength of shareholders holding heavy positions.
5. The bottom consolidation time is long
Under normal circumstances, the bottoming time of big bull stocks will be very long, which is also a major feature of big bull stocks, for super potential stocks with a rise of 10 times or more than 10 times in the future, the most important thing is that the price should be low enough, and the plate is suitable for the main intervention of large institutions. Only by constructing a perfect big bottom can a big market be derived in the market outlook, that is to say, a stock with the intervention of a large institution "can rise vertically for as long as it goes sideways".