: If you are doing stock investment, if you are doing short-term trading, it is best to choose strong stocks when choosing stocks and avoid weak stocks. Because the short-term trend of stocks is often the strong, it is easier to make money by buying strong stocks in the short term. So, in actual operations, how to judge the strength of a stock?
How to judge the strength of a stock?
First of all, it can be compared with the rise and fall of the stock price and the rise and fall of the market index. The market index of stocks represents the entire stock market, so the rise and fall of the market index is equivalent to the average rise and fall of all stocks in the stock market.
Generally speaking, as a strong stock, you must at least outperform the market index. When the market index rises slightly, it rises sharply, when the market index falls slightly, it does not fall when the market index falls slightly, and when the market index falls slightly, it falls slightly. Stocks with such characteristics can be regarded as strong stocks.
Of course, as a strong stock, it does not necessarily outperform the market index every day. Therefore, to determine whether a stock is a strong stock, we cannot just look at whether the rise and fall of a certain day outperforms the market index, but it depends on the situation for a period of time. In addition to comparing with the market index,
can also be compared with stocks with industry indexes, concept indexes, etc. Stocks whose returns can outperform these indexes can also be regarded as strong stocks.
Secondly, it is to judge through technical indicators. As a strong stock, its stock price will show a gradual upward trend. Therefore, through some trend technical indicators, it can be more clearly determined whether the stock is strong or weak.
For example, the moving average can record the trend of a stock price over the past period of time. If the moving average is in a fluctuating upward trend and has been lower than the stock market price, then this stock may be a strong stock.
In addition, if the moving average combination is used, as long as the moving average combination shows a long arrangement, that is, the position of the short-term moving average is higher than that of the long-term moving average, this type of stock can also be regarded as a strong stock.
In addition to moving average, there are many technical indicators that can judge the strength of stocks. For example, the often used MACD shows that the stock is in a strong position when the two lines of MACD are above the 0 axis. For example, Bollinger Band , when the Bollinger Band opens upward, the stock is also showing strong performance.
Through technical indicators, it can not only well determine whether the stock is in a strong state, but also well observe the changes in the strength of the stock.
Again, it can be judged by directly observing the price trend of the stock. In stock market viewing software, K-lines are usually used to record the trend of stock prices. As a strong stock, because its price has risen most, the K-line that records its price is mostly positive.
In addition, strong stocks do not always rise, and may also pull back, but the low point of each pullback is generally higher than the low point of the previous pullback.
Finally, it can be judged by trading volume. The reason why strong stocks can remain strong is mainly because there are more investors buying this stock in the market, and more investors buying stocks will increase the trading volume. Therefore, when a stock remains strong, the trading volume will increase significantly during this period.
In addition, while trading volume has increased significantly, it is also accompanied by an increase in turnover rate. When the price, volume and turnover rate increase significantly, the stock is likely to be a strong stock.
