KLine Refinement Analysis Lesson 6: Three Methods of Descending Continuous Forms

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

Psychological Analysis
The three ways of decline pattern is generally considered as a brief rebound in a downward trend. This continuous small positive line indicates that some investors who are looking forward to the market are trying to enter and take a bottom, but from the small increase in consecutive days, it can be seen that these bottom hunters are hesitant. Once a new high cannot be formed in consecutive adjustment days, which swing and indecisive bottom hunters begin to sell stocks, At the same time, the original bulls also began to join the selling team, and the market price continued to fall, creating a new low for a period of time.

[Related form] None.

Practical Application
2019year4month26Shanghai Pharmaceutical Co., Ltd3.14%There was a significant decline in volume and a slight increase in volume in the following two days,5month6A Japanese root5.36%The volume of the stock plummeted to a new low.

This case belongs to a variant of the descending three methods, with a reduction of one central line, but the meaning of the form still applies.

**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.