In the last issue, we said the "V-shaped bottom", knowing the buying and selling points, and copying the bottom and escaping the top is the highest state pursued by every shareholder, but it is not easy to really do it, and it is more important to escape the top than to copy the bottom.
What is an inverted V-shape?
The inverted V-shape usually shows that the stock price rises rapidly and then falls rapidly, the head is a spire, and it can usually form a peak reversal trend within a few trading days, and the turning point has a large trading volume, so it is also called "sharp knife top".
The technical meaning of an inverted V-shaped is to hit the top and plunge, a sell signal.
When the inverted V-shape appears, investors should stop the loss in time to leave the market, once the inverted V-shaped trend is formed, the stock price falls quickly, only a few days or 1 to 2 weeks The stock price falls most of the time is common, investors must be vigilant about this.
Features of an inverted V-shape
1: Generally appears at the high level of the market.
2: First, the stock price rose rapidly and then fell rapidly, and the change in trading volume decreased with the rise of the stock price, which was manifested as the strength of the bulls weakened, and the profit selling pressure increased, and then the head was formed as a spire.
3: There is a large volume at the turning point, and the turnover rate is also very high, the signs of the main force fleeing are already obvious, the bears have the upper hand, and then the situation takes a sharp turn.
Practical operation skills
Theoretically, the confirmation of an "inverted V-shape" requires the stock price to fall below the extension of the low at the beginning of an uptrend to the left of the V-shaped top in order to define the "inverted V-shape" trend as completed.
The left side of the "inverted V-shaped" stock price rises sharply, and the K-line usually rises all the way along the 5-day moving average, indicating that individual stocks are in a strong upward offensive stage, at this time, if the stock price falls below the 5-day moving average, we must be wary of individual stocks that may turn from strong to weak, and when the stock price effectively falls below the 10-day moving average, we need to consider timely weight reduction operations.
If the "small three lines" (5th, 10th, and 30th) in the moving average system form a "death cross" and "death valley" pattern at a high level, it is necessary to consider selling out.
An investment strategy of inverting the V-shaped top
1: Sell in time: When the inverted V-shaped top appears, investors should stop and leave the market in time to avoid the expansion of losses.
2: Pay attention to volume: Volume plays an important role in the formation of an inverted V-shaped top, especially when the stock price falls and the volume is amplified, which usually means that the downtrend will accelerate and may continue for a longer time.
3: Be wary of extended patterns: Sometimes an inverted V-shaped top may form an extension pattern, where the stock price finds support and rebounds after falling to a certain level.
However, investors should be wary that such a rally may be only a short-lived respite, after which stock prices may continue to fall.
The inverted V-shape is an important stock market top reversal pattern, the appearance of which often means a sharp change in market sentiment and a rapid decline in stock prices; Investors should pay close attention to market dynamics and trading volume changes during the investment process, and identify and respond to risk signals such as inverted V-shapes in a timely manner.
Well, that's all for today's content sharing! Happy learning! See you next time!