After the market rose to a temporary high point (101.495), it began to decline, going through 5 waves of decline, finally dropping to 101.295. While the decline has stopped, we notice that its KDJ value is below 20, which indicates that it is currently in the oversold zone. In addition, we can also see that after the 5 waves of decline, there was a bottom-building phenomenon and an increase in volume, which is a typical bottom-building signal. The market may first build a bottom to stop the decline, and then start to rise.
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Regardless of whether the market is rising or falling, its trend has certain patterns to follow, more or less. Knowing the patterns that the market follows at each stage will greatly assist us in analyzing the market.