The stock market is unpredictable, and no investor can guarantee that they will always be invincible in the stock market. There are many excellent investors in the market, and investment strategies and methods can be used as references, but it is important to understand that even the essence of other people's ideas will always be someone else's, and the most important thing is how to find the most suitable for yourself in the vast sea of theories and transform them into your own investment style, which requires a long time of practice and accumulation. Therefore, after investors enter the actual combat, they must pay attention to the accumulation and integration of knowledge, constantly adjust the investment strategy according to their own preferences, and will definitely form their own investment style over time.
The first case: the evening star
The evening star is the brightest star when the night comes, indicating that the stock market will change.
As shown in Figure 1-1, the evening star is composed of 3 or more candlesticks, the first candlestick is a white candlestick, followed by a doji with a gap, the third candlestick is a black or white candlestick with a gap low, and the star line formed by the gap on the second day forms a certain gap with the two days before and after, which is the evening star pattern.
The evening star usually appears at the end of the continuous rise in the stock price, the bulls want to stimulate the market again at the end of the rise, pull the stock price to a new height, and can't wait to gap high, but because the bears are already strong at this time, the bulls' pulling power is completely consumed, forming a high-level star line with almost the same opening price and closing price, at this time, the bulls are exhausted.
In the following trading days, the bears made the stock price gap low, and the bulls had no strength to fight back, indicating that the rally was over, and the bears began to enter the counterattack process, and the stock price only fell or consolidated at a high level.
Case Study: Top Pattern Evening Star Example – Thousand Yams Machine (300216)
As shown in Figure 1-2, Qianshan Yao Machine entered a small band upward process in the early stage. The rising process was supported by the trading volume, and the market seemed to have begun to enter a round of upward channel, with the stock price breaking through from 3 yuan to above 5 yuan, and the rise was very rapid.
However, instead of continuing to rise, the stock price fell and corrected. Subsequently, the stock price appeared in a high opening pattern, but soon entered the process of decline, and finally closed with a small Yang Doji, indicating that the day of the bulls and bears fierce game, and finally the bears occupied the market, and the stock price gradually fell from the shock to the opening price.
The K-line closed a large black candle that opened low and went low, which was formed by the combination of evening stars, indicating that the stock price rise market is over, and the market will usher in a round of downward market. Investors should flee in time after discovering the twilight star line.
The second case: the dark cloud line
Dark clouds obscured the sun, and things were not good. As shown in Figure 2-1, the dark cloud candlestick is composed of a white candlestick and a long black candlestick, and the long black candle on the second day is much higher than the white candle formed on the previous trading day, forming a dark cloud peak, indicating that the market trend may change in the future.
On the first day, the long white line indicates that the stock price has a typical rise on the same day, the bulls have the advantage, and it seems that the bears are powerless to parry, and on the second day, the bulls will gap the stock price with the help of the previous day's upward trend, forming a typical high opening pattern.
While the bulls were able to pull the stock price up to its highs on the day, the bears had already experienced an early build-up and were able to control the market completely. Therefore, after the bulls began to rise wildly, the bears began to fight back, and when the bulls thought they controlled the market, they gave the bulls a blow to the head, suppressed the stock price to the bottom, and turned the gap high into a long long black candle, forming a dark cloud line.
After the formation of the dark cloud line, it will inevitably cause a psychological implication that the bulls will be blocked at a high level, indicating that the bulls will not be able to continue to pull up the stock price at this time, the bulls' confidence will be hit, and the market will also panic with the bulls fleeing.
Case Study: Example of the Dark Cloud Line in the Early Decline - Hisun Pharmaceutical (600267)
As shown in Figure 2-2, Hisun Pharmaceutical's stock price continued to rise in the early stage, and the stock price rose rapidly from 8 yuan to around 13 yuan under the control of market makers.
However, shareholders can find that the stock price rose to 11 yuan after the consolidation, in early April suddenly rose sharply, K-line closed out of 5 positive lines in a row, but the bottom of the volume did not increase accordingly, indicating that this rise is unstable, because the infinite rise may appear at any time short throwing phenomenon, the stock price may appear to continue to fall.
Subsequently, on April 10, the dealer began to launch a new round of offensive, and the stock price began to move towards 13.5 yuan.
However, on April 11, there was a turnaround, although the stock price opened high, but gradually fell intraday, although it hit a new high of 13.77 yuan, but finally affected by a large number of selling orders, closed out of the big black line. The long white candlestick on April 11 and the day before form a typical dark cloud candlestick pattern.
As shown in Figure 2-3, after the formation of the dark cloud line, the market psychology changed, and the trading volume in the same period showed a high level of volume, which made the early investors worry that the market would continue to fall, and they left the market one after another, and made profits in time, or cut the meat out. In this case, the seller began to occupy an absolute advantage, which intensified the decline of the stock price, and in less than 3 months, the stock price fell from 13 yuan to around 9 yuan, a decline of more than 30%.
The stock began to continue to fall after consolidating at a high level, although the market also rebounded, but it was still suppressed by the bears, and the stock price continued to maintain a low consolidation trend.