The market started to decline from a phase high, dropping to a low of 3128, experiencing three declines in between. We can observe that the magnitude of these three declines is roughly similar, which is one of the most obvious characteristics of wave theory. In actual trading, we can analyze various market conditions based on this characteristic, using it as a signal for profit-taking, market stabilization, or stagnation.
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If the market shows signs of bottoming after a five-wave decline and there is an increase in volume, then the market may have reached its bottom. Meanwhile, the KDJ indicator will show an oversold signal. A KDJ value below 20 indicates the oversold zone, meaning that over 80% of people are selling; a KDJ value above 80 indicates the overbought zone, meaning that 80% of people are buying. Of course, any technical indicator is relative and not absolute. When analyzing the market, we cannot rely solely on a single technical indicator for our analysis.
