What does it mean when stocks shrink at different positions?

Shrinking stock volume means the trading volume decreases, while increasing stock volume means the trading volume increases. When the stock price rises, it is normal for the stock trading volume to increase; when the stock price falls, it is a good thing for the stock trading volume to decrease. (The following is the relevant information that the editor has collected for you on what it means when stocks shrink at different positions. I hope you like it.)

The stock rises quickly, especially when it breaks through the pressure level, the trading volume should be effectively amplified. Otherwise, the breakthrough is invalid and you will face a callback. When a stock falls, if it does not shrink but increases, it means institutions are selling and should leave the market in time.

1. Shrinkage at a high level

If the stock price rises too high and trades sideways at a high level, it is estimated that the stock will shrink when the main force ships. It proves that retail investors are not active in chasing the rise of stocks. If the main force continues to ship, the stock will probably fall to the limit because no one will take over the order. Therefore, at this time, the main force will usually make a false breakthrough after a small rebound, and then continue to ship after retail investors come in. Try not to chase stocks at this time, as the risk is too great.

2. Stocks shrink and rise during the process of rising

At this time, it proves that the buying momentum is insufficient, the pursuit of the increase is not enthusiastic, and the trading volume can no longer support the rise in the stock price. This usually happens at this time. Small pullback. If the stock price rises relatively large, it is also a situation of volume and price divergence, and the stock price is very likely to reach a peak in the short term.

3. The stock price is at the bottom, and after a breakthrough in heavy volume, it pulls back and shrinks again.

At this time, the stock has experienced a wave of heavy volume in the short term, but the magnitude of the increase is small. There is no room for shipment, and the main force feels that there are more floating chips after pulling up, and starts to wash the market. The shrinkage at this time is a good thing, which means that the floating chips are getting less and less. You can intervene when extreme shrinkage occurs, which means that The end of the main force's washout.

Shrinking stock volume means the trading volume decreases, while increasing stock volume means the trading volume increases. When the stock price rises, it is normal for the stock trading volume to increase; when the stock price falls, it is a good thing for the stock trading volume to decrease. If a stock rises quickly, especially if it breaks through the pressure level, the trading volume should be effectively amplified, otherwise the breakthrough will be ineffective and it will face a correction. When a stock falls, if it does not shrink but increases, it means institutions are selling and should leave the market in time.

1. Shrinkage at a high level

If the stock price rises too high and trades sideways at a high level, that is, it is estimated that the stock will shrink when the main force is shipping. It proves that retail investors are not active in chasing up the stock price. If the main force continues to ship, the stock will probably fall to the limit because no one will take over the order. Therefore, at this time, the main force will usually make a false breakthrough after a small rebound, and then continue to ship after retail investors come in. Try not to chase stocks at this time, as the risk is too great.

2. Stocks shrink and rise during the process of rising

At this time, it proves that the buying momentum is insufficient, the pursuit of the increase is not enthusiastic, and the trading volume can no longer support the rise in the stock price. This usually happens at this time. Small pullback. If the stock price rises relatively large, it is also a situation of volume and price divergence, and the stock price is very likely to reach a peak in the short term.

3. The stock price is at the bottom, and after a breakthrough in heavy volume, it pulls back and shrinks again.

At this time, the stock had a wave of heavy volume in the short term, but the increase was small. There is no room for shipment, and the main force feels that there are more floating chips after pulling up, and starts to wash the market. The shrinkage at this time is a good thing, which means that the floating chips are getting less and less. You can intervene when extreme shrinkage occurs, which means The end of the main force's washout.

What is shrinkage

In a simple word, shrinkage in trading volume means shrinkage. Price affects trading volume, sometimes positively and sometimes negatively. Several situations of shrinkage are explained in detail below.

1. Shrinkage and decline.

It is also called a drop in both volume and price. This refers to a decrease in the closing price and a decrease in trading volume on the day. Trading volume is an expression of supply and demand. When the supply of stocks exceeds demand, people rush to buy them, and the number of transactions naturally expands. On the contrary, when the supply of stocks exceeds demand, the market is depressed, and the desire to buy is very low, the trading volume must be shrinking.

Shrinking is an adjustment process in the market. The short-term rise and fall depends on the direction of the next news. Bad news will lead to a fall, and vice versa, it will rise. In the actual trading process, it is normal for stock prices to fall and trading volume to fall, because no one is willing to cut off the stock and run away, and no one is willing to take over stocks with an uncertain future, so there are fewer transactions. Only after panic selling does volume increase again and then stabilize again.

2. Shrinkage increase

In the process of rising stock prices or market indexes, the transaction amount shrinks significantly compared with the previous trading day, which is called shrinkage increase. A shrinking increase or an unlimited increase is often regarded as a dangerous signal in the rise, which shows that the bulls do not have enough strength to do so. But there is another situation in the market, that is, when the main funds control a large number of panels, there will be unlimited surges when rising; in addition, when the entire market continues to fall and rises indefinitely, this may be a signal of market reversal, because in continuous After the decline, many short-term investors will cut their flesh and flee, and the market selling pressure will be reduced, so it is easy to shrink and rise.

3. Shrinking sideways trading

Sideways trading refers to the trend of the index or stock price fluctuating slightly up and down in a narrow range, and the corresponding trading volume is higher than that of previous trading days. Be low. Sideways shrinkage is caused by market makers washing the market, so it is caused by sideways consolidation. There will definitely be a wave of price increases. However, this does not mean that the stock price will rise immediately after it has adjusted sideways. Some fierce market makers will suddenly lower the stock price after arranging sideways trading, and then the dealer will raise the stock price again. After the dealer's tossing, many short-term investors will be scared away. So we need to analyze what is the real reason behind the sideways movement.

Infinite short rise - more joy than worry

Usually, unlimited rise is regarded as a danger signal, because it shows that bulls have insufficient energy, but this is not the case. Since China's stock market is still immature, it is quite common for group funds to concentrate their firepower on individual stocks with relatively small circulation. As a result, all kinds of bull stocks came into being. Such stocks tend to have relatively large trading volumes when they start, fierce battles between long and short, and unpredictable market trends. However, once this large-volume shock process is completed, the market will gradually enter a state of infinite shortness. rising status. Since a large proportion of the circulating capital is locked, a small number of scattered retail chips follow the main players in locking up positions when the unilateral upward trend continues. As a result, the short rise in the market is often endless. A large part of the rise of many big bull stocks is often in the stage of unlimited short growth. The most typical one is Nantong Machine Tool. After continuous fluctuations and huge sales volume in early April 1999, the trading volume began to shrink and the stock price also rose slightly. It seemed that the general trend was not good, but then it rose sharply; another example is the super bull stock Condal In the long bull market, there have been many times of unlimited short-term growth. Of course, before this kind of unlimited short rise, there must be a process of heavy volume shocks and gradually forming a clear upward trend. Therefore, short rise is not a bad thing. As long as it is unlimited, the structure of its main funds will obviously not change. Generally speaking, the market will continue to improve until the trading volume changes and the nature of the market changes.

Shrinking volume and falling - the general trend is not good

Generally speaking, a large-volume falling is a dangerous signal, while shrinking and falling shows that the short side has insufficient energy, so the danger is not great, but I think , Shrinkage and decline are often even worse. For individual stocks, if they continue to fluctuate at a high level and release huge amounts, and then suddenly release huge amounts and plummet, there will inevitably be a strong rebound, and then gradually shrink and fall. If you think that the stock is under the control of the main banker, the trading volume will shrink, and the main banker will be unable to If you are out of the game, you may have to pay for it, but the market is still promising, so that would be a mistake. On the one hand, there is no reason to guarantee that the main funds will never be locked up. On the other hand, in the process of high fluctuations and heavy volume before the trading volume shrinks, it is difficult to determine what tricks the main funds have played. Therefore, many strong market makers are under the influence of shrinkage. After a decline, the decline is often long in the later period. More importantly, it often seems that the decline is not large, giving people the illusion of support. Investors are psychologically able to withstand such a small decline. Unexpectedly, this is a blunt knife. Cutting meat didn't seem dangerous at first, but when I looked back after a while, I saw that I had already slid down the mountain. Therefore, we must remain highly alert to stocks that have shrunk and fallen after major shocks. These stocks often fall to the point where holders despair, would-be buyers are disappointed, and are eventually forgotten.

Changes in trading volume - re-judgment of the market

Infinite short rise or shrinkage and negative fall often represent a trend. As long as the characteristics of shrinking trading volume do not change, the nature of the market will often It will also extend, but if the trading volume suddenly changes dramatically, all the basic conditions for judging the market in the past, such as fundamentals, technical aspects, main funds, market hot spot structure, etc., must be re-examined, and the previous conditions must not be used due to inertia. of judgment.

For example, after an unlimited short-term rise, there will be a huge surge in volume or a sudden shock and a huge drop; for example, after a shrinking volume, there will suddenly be a large-volume shock at a low level. The market must be re-judged based on this. It is very likely that the nature of the market is changing. , it is very likely that the market has risen too high or fallen too low. Generally speaking, after a long period of shrinking and negative market trends, it is often difficult to reverse the decline when the market increases its volume for the first time, and this kind of trading volume often only shows a long red column on the trading volume chart. Compared with the previous trading volume, the trading volume has increased several times, but the absolute trading volume has not changed significantly. The market has been repeated. However, if it fluctuates repeatedly, continues to increase the volume, and the market continues to be low for a long time, then the trading volume must be accumulated. Regardless of whether it is an upward breakthrough or a downward breakthrough, such a trend requires attention. If the trading volume trend remains unchanged, the market trend will extend; if the trading volume changes, the market needs to be re-judged. This is not only important to study the trend of shrinking stocks

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