Revealing The Unique Price Trend Of Stocks: Tai Chi Forms Like Tai Chi, A Must-see For Investors
I have discovered a unique price trend in many years of trading. It is the stock form of Tai Chi. It is very similar to the kind of softness that overcomes hardness in Tai Chi Kung Fu. This form often appears when the main funds are quietly deployed. On the surface, it is as quiet as water, but in fact there is an undercurrent surging inside. This is worth savoring by investors.
What are the core characteristics of Tai Chi stock patterns?
The distinctive feature of the Tai Chi pattern is that the price repeatedly fluctuates in a narrow range, and each time it falls back to the low point, it gradually rises. Just like the movement of the dividing cloud hand in Tai Chi boxing, it appears to be spinning in a circle, but in fact each arc is advancing forward. This form is often accompanied by an orderly reduction in trading volume. When the price falls back to the key moving average, the selling pressure will be significantly weak and sluggish.
I pay special attention to the supporting role of the 20-day moving average in this process. When the stock price receives support on the 20-day moving average three times in a row and creates a higher low, Tai Chi For Health , it is like the "three-ring moon" tai chi stock form in Tai Chi, which often indicates that the breakthrough time is approaching. The turnover rate at this stage will remain at a relatively stable level, indicating that the chips are changing from impetuous short-term investors to determined mid- and long-term investors.
How to identify the buying time of Tai Chi pattern
The moment when the real buying signal appears is when the heavy volume breaks through the upper limit of the shock range. This situation is like the "force" movement in Tai Chi, which involves a completely precise combination of speed and power. I usually wait for the confirmation of the retracement after the breakthrough, especially when the stock price once again tests the upper track of the previous shock range and obtains support; at this time, it is the safest intervention point.
I remember a technology stock that I operated last year. It consolidated at the bottom for two full months. Each decline was as gentle as the "energy" of Tai Chi. It finally came out of the standard Tai Chi form before the performance announcement. I bought Tai Chi For Diabetes when I stepped back after the heavy volume breakthrough, and then ushered in an increase of more than 50%. The key thing is to wait patiently for the moment of "strength".
Risks to be aware of when operating Tai Chi forms
Not any form is 100% reliable, Tai Chi form also has the possibility of failure. The most common problem is that after a breakthrough, the energy cannot be maintained in a sustained state. This situation is as if Tai Chi has only done half a set of movements. If I encounter this kind of situation, I will strictly implement the stop loss rules, and usually set the stop loss position at the lower track of the shock range.
Another thing we need to be wary of is false breakthroughs. Some major funds will deliberately create the illusion of breakthroughs and conduct reverse operations after luring retail investors to follow suit. My experience is that when the true Tai Chi pattern breaks through, the DIF line of the MACD indicator will rise significantly, and the DEA line will follow simultaneously. If there is an indicator divergence, you have to be especially careful.
During your investment career, have you ever encountered stocks with Tai Chi patterns? You are welcome to share your own practical experience in the comment area. If you think this article is helpful to you, support it by liking it and share it with more friends who have such needs.