KLine Refinement Analysis Lesson 5: The Three Methods of Continuous Form Ascension

Recognition Rule
1）The market was in an upward trend before, with a large positive line appearing first, continuing the upward trend of the market;
2）Afterwards, there were several consecutive small negative lines in the market, but the decline was still within the range of the first large positive line;
3）On the last day, a large positive line appeared, with both the bottom and top reaching new highs relative to the first positive line.

Psychological Analysis
The three methods of upward movement are generally considered as temporary adjustments in the overall upward trend. This continuous small negative line indicates that some unstable investors are taking profits, and the main market forces will continue to operate along the original upward trend after shaking them out.

From the small decline in the adjustment day, we can see that these investors are hesitant. But once a new low cannot be formed in the consecutive adjustment days, those investors who are wavering and uncertain will start to buy stocks, so the market price continues to rise and hit a new high for a period of time.

Related Forms
The rising three methods are similar to the bedding form that will be discussed later, except that the middle of the bedding form is not a negative line, but a positive line. Therefore, the bedding form has a stronger bullish signal compared to the rising three methods.

Practical Application

2019year6month1Daily appearance of Wuliangye8.47%There was a significant increase in volume, followed by four small negative lines, followed by a small positive line and a small negative line, but these sixKAll lines are within the range of the first large positive line, and the transaction volume is very small. Finally6month20Riwuliangye6.68%The increase in volume hit a new high in the Yang market. This case belongs to a variant of the ascending three methods, but the core has not changed, except for one or two more small yin and yang added midway.


***Risk statement***
KLine analysis is only an indicator tool used to judge the strength of buyers and sellers in the market and market sentiment. How to identify and study is subjective to some extent. It may not be correct to judge the future market. Many fundamental investors never analyzeKChoosing to hold high-quality individual stocks for a long time has also resulted in significant returns. Please evaluate for yourself whether and how to use itKLine tool.