The K-line chart originated from the Tokugawa shogunate era (1603-1867), and was used by businessmen in the Japanese rice market to record the market and price fluctuations of the rice market at that time. futures market. Through the K-line chart, we can completely record the market conditions of a day or a certain cycle. After the stock price has been trading for a period of time, it will form a special area or shape on the map, and different shapes show different meanings. The three K-line combinations of insertion line, holding line and positive stimulus line are the most common classic bottoming patterns.
The clarity of the bottom signal of the K-line combination is different. The weakest bottom signal is the insertion line, and the strongest is the positive stimulus line.
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Insert line. After the stock price opened low, it did not continue to go down, but there was a clear rebound trend, but the rebound strength did not exceed the opening position of yesterday’s negative line, which is equivalent to inserting the right positive line into the left negative line. This pattern is called Insert line.
The classic insertion line must meet the following conditions, that is, the intensity of the attack of the positive line must be large, at least half or more of the negative line of yesterday. For example, the market formed a plug-in line on July 3 and 18, 2012, and then the stock price went up all the way, up as high as 13% and 8%.
Hold the line. Holding the line is the evolution of the insertion line. The rebounding Yang line on the right exceeds the opening position of the Yin line yesterday, forming a holding line. The positive line on the right exceeds the opening position of the negative line on the left, indicating that the multi-party attack power is very strong, and its bottoming signal is much stronger than the insertion line.
Positive stimulus line. After the stock price fell for a long time, a falling negative line suddenly appeared. Just when most people thought that the market outlook would continue to fall, the stock price suddenly opened higher and moved higher under the positive stimulus the next day, and it also exceeded the negative line of yesterday. The opening price position, this is the positive stimulus line with a very clear bottom signal.