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.
In the stock market, divergence from technology has always been a technique for accurately judging the buying and selling points, but it is not easy for investors to make accurate judgments. However, if the 135 EMA system can be used to invest, it will be fairly easy to identify divergence patterns.
The 135 moving average divergence technology has an important reference value for the judgment of the trend, and it can be said that there is no divergence and no turn. When the trend is about to reverse, if the 135 moving average divergence of the stock price running upward and the moving average running downward appears, and the technical indicators are running upward, then the running trend of the stock price will often turn from weak to strong, which is the form of buying stocks; If the divergence of the 135 moving average running downward and upward moving averages occurs: the technical indicator is running downward, then the stock price trend tends to change from strong to weak, which is a pattern of selling stocks.
The first is the divergence of the moving average from the stock price
The divergence between the moving average and the stock price is the most obvious trend divergence, which refers to the opposite movement pattern of the 13-day, 34-day, and 55-day moving averages of the 135 moving average when the stock price is going up (down). This divergence between the moving average and the stock price, if it is supported by technical indicators and the stock price, will cause a trend reversal, so it is an effective indicator to judge the trend reversal.
Practical cases:
As shown in Figure 1-1, the stock price of Xishan Coal Power (000983) hit a new low and then went up, and the moving average was running downward at this time, forming a divergence between the moving average and the stock price, and at the same time, the MACD issued a golden cross to run upward, indicating that the trend is about to turn from weak to strong and reverse to up. As a result, investors can buy stocks at this time. When running to the 16th to the 19th, the stock price runs downward, but the moving average is still running upward, and the MACD indicator is going down and a dead fork occurs at this time, indicating that the trend is about to reverse downward, from strong to weak. As a result, investors can sell shares at this time.
Practical Essentials:
(1) When the divergence between the moving average and the stock price appears, if it appears in the low area after a long-term decline, it is often the divergence of the stock price up and the moving average downward, that is, the bottom divergence.
(2) If the divergence between the moving average and the stock price occurs in the high area after the rise, and the technical indicators are also running downward, the trend is very likely to reverse to the downside.
(3) When the divergence between the moving average and the stock price occurs, the technical indicator often becomes an important reference for judging whether the trend will reverse, and only when the technical indicator is synchronized with the direction of the stock price is the sign of trend reversal.
The second is the divergence of the moving average from the technical indicator
The divergence between the moving average and the technical indicator refers to the downward (upward) movement pattern of the technical indicator in the opposite direction when the 13-day, 34-day, and 55-day moving averages are running upwards (downwards). The divergence between the moving average and the technical indicator is in fact the divergence of the two indicators, and the moving average is set according to the operating cycle of the stock price, so it is actually a trend divergence between a technical indicator and the operating cycle of the stock price. This divergence helps to judge the trend. The divergence of the moving average upward and the technical indicators downward is often a sign of a trend reversal when the stock price changes from rising to falling, and it is a selling pattern; The divergence of the moving average downward and the technical indicator upward is often a sign of a trend reversal in which the stock price is about to turn from falling to rising, and it is a buying pattern.
Practical cases:
As shown in Figure 1-2, the 13-day, 34-day and 55-day moving averages of Jinma shares (000980) are running downward, but the MACD in the technical indicators has a golden cross running upward, indicating that the trend is about to reverse from falling to rising. Therefore, investors can buy stocks at this time.
In the meantime, after a long suspension of trading, when the stock price runs to the 16th to the 24th, the 13th, 34th, and 55th moving averages show an obvious upward bullish arrangement, but the MACD in the technical indicators has a downward running death fork. This indicates that the stock price trend is about to reverse from bullish to downward. Therefore, investors can sell shares at this time.
Practical Essentials:
(1) If the divergence between the moving average and the technical indicator occurs in the low-level area of the long-term decline, it is generally the bottom divergence of the moving average downward and the technical indicator upward, which often indicates that the trend will reverse and turn upward, which is a buying pattern.
(2) When the divergence between the moving average and the technical indicator appears, if the stock price has experienced a certain range of rising process, generally the top divergence of the moving average upward and the technical indicator downward, the divergence often means that the trend is about to reverse downward, which is a selling pattern.
(3) When judging the trend reversal of the divergence between the moving average and the technical indicators, investors should start from the previous stock price trend, and only by distinguishing what the divergence is, can the trend reversal in the future market be determined.
The third type: the divergence of the moving average from the volume
The divergence between the moving average and the volume refers to the gradual increase in volume (large drawdown) after a significant reduction in volume when the moving average is running downward (upward). There are two situations of this divergence: when the moving average runs downward, and the volume appears to increase gradually after a sharp reduction, it is a bottom divergence, and if the technical indicators support the upside, it indicates that the trend is about to reverse and turn upward, which is a buy pattern; When the moving average is moving upwards and the volume is sharply reduced, it is a top divergence, and if the technical indicators support a downward movement, it indicates that the trend is about to reverse to the downside, which is a sell pattern.
Practical cases:
As shown in Figure 1-3, after experiencing the decline and shrinkage in the early stage, the trading volume of Guilin Tourism (000978) has gradually increased, but the moving average system is still in a downward short arrangement pattern, forming a bottom divergence between the moving average and the trading volume. At this time, the technical indicator MACD showed a golden cross upward trend. This indicates that the stock price is about to leave the low zone and the stock price trend is about to reverse to the upside. As a result, investors can buy stocks at this time.
When the stock price rises, the moving average is still an upward bullish arrangement, but the trading volume has decreased sharply step by step, forming a top divergence between the moving average and the trading volume. At this point, the technical indicator MACD appears as a dead fork running downward. This indicates that the stock price is about to peak and reverse. Therefore, investors can sell shares at this time.
Practical Essentials:
(1) When the stock price has experienced a decline in the early stage, and the trading volume that has been extremely shrinking suddenly increases steadily in the low area, while the moving average is still running downward, the divergence between the moving average and the bottom of the trading volume indicates that the stock price is about to reverse upward, which is a buying pattern.
(2) When the stock price has experienced a rise, the trading volume has gradually decreased sharply in the high-level area, and the moving average is still running upward, the moving average diverges from the top of the trading volume, indicating that the stock price is about to reverse downward, which is a sell pattern.
(3) When there is a divergence between the moving average and the trading volume, only when the technical indicators are running in sync with the stock price can indicate that the trend is about to reverse.
(4) When there is a divergence between the moving average and the trading volume, investors should first see where the stock price is located in order to accurately judge the direction in which the trend is about to reverse.