There are many methods to find bull stocks, and the first method is the breakthrough limit-up stock picking method!
So how do we specifically search for breakthrough bull stocks?
To find bull stocks through breakthrough methods, we need the following tools, or indicators:
Firstly, moving average; secondly, sideways range; thirdly, trading volume.
So how should we use these three tools?
First, we need to look at the moving average; here we choose the 30-day moving average.
To find breakthrough bull stocks, the 30-day moving average we select should not be in a downward state; that is, we need to choose stocks with a 30-day moving average that is flat or upward from our stock pool.
This is the first point.
The second point,
After looking at the moving average, we need to look at the price, which formed a sideways range. How should we understand this?
It can be understood as the price fluctuating up and down around the moving average, forming a price pattern similar to a rectangle.
Thirdly, trading volume.
When we select stocks with roughly flat moving averages, and the price is also fluctuating up and down around the moving average, the next thing we need to look at is the trading volume.
During the sideways consolidation period, trading volume should ideally maintain a reduced state, and it is best to increase volume when rising and decrease volume when falling, showing signs of 'accumulating funds.'
Finally, there must be more than one or two stocks in the market that meet this condition. What we need to do is to include the stocks that meet the criteria into our key focus stock pool and wait for the signal of the bull stock to start!
This signal is a breakthrough and a limit-up!
What does this mean?
The signal for the bull stock to start is when the stock breaks through the sideways range and a limit-up candlestick appears; this is the starting point for the bull stock!
Before this, do not enter! Because we do not know when it will break through or start.
Good steel should be used on the edge of the knife! As long as you hold stocks, there will be time costs, capital costs, and opportunity costs. What we hope for is to avoid the fluctuation period before the bull stock and catch up when it starts.
According to this method, which bull stocks can be selected? Is it still useful during a weak market? Let's take a look at recent examples.
Xinhua Pharmaceutical, an outstanding representative among COVID-19 drugs.
This is at the end of December, when the market was already on the brink of a major decline.
And Jinghua Pharmaceutical has exhibited the three characteristics of a bull stock mentioned above.
The first point, the moving average is flat or upward.
The second point, the price has formed a sideways consolidation range.
Thirdly, during this period, the trading volume shows a clear reduction.
The starting signal appears at the position where the recent large bullish candlestick begins.
This large bullish candlestick not only broke through the sideways range but also hit the limit-up on that day, meaning the starting signal was completed in one day.
The subsequent trend of Jinghua Pharmaceutical is as follows:
After the starting signal appears, the next day opens high and falls low but does not break the limit-up low point of the previous day, which is very important because it means the price remains strong!
Then, there were 8 consecutive limit-ups!
Coincidentally, in the last three months, Jinghua Pharmaceutical had another wave, still following the original model.
In March, the Shanghai Composite Index was in a main downward wave, while Jinghua Pharmaceutical did not fall; instead, it exhibited the three characteristics of a bull stock.
Firstly, the moving average is flat.
Secondly, the sideways range.
Thirdly, reduced trading volume.
On March 17, Jinghua Pharmaceutical broke through the sideways range; on March 18, Jinghua Pharmaceutical hit the limit-up, completing the starting signal!
Then, it formed a three-limit-up process in four days. Again completing a bull stock process.
So, apart from this, does this model only appear in Jinghua Pharmaceutical? Is it applicable to other stocks?
Let's look at the following examples.
Aoxiang Pharmaceutical first appeared in November 2021.
The second time was at the end of February 2022.
Junda Co., Ltd. first appeared in July 2021.
The second time appeared in November 2021.
Of course, this method is not a holy grail and cannot succeed every time! Because the entire market operates on a probabilistic basis.
Therefore, we should also imagine how we would operate if we do not succeed.
Generally speaking, large bull stocks in an upward trend will not break below the recent limit-up candlestick low point.
Therefore, if the price falls below the recent limit-up candlestick low point after entering the market, it means the market may not meet expectations, and we should exit and wait for the next opportunity.
But using the cost of one candlestick to seize the opportunity to grasp a large bull stock trend, I think it is still worth it.
Because as long as the risk is controlled well, seizing one large bull stock can offset multiple failed trades.
Follow De Ge with precise strategy analysis, carefully selected by millions of Ai big data, to keep ourselves invincible? The market never lacks opportunities; the question is whether you can seize them. Only by following experienced and the right people can we earn more!
