KLine Refinement Analysis Lesson 10: Continuous Form of Bullish Three Line Strike

Recognition Rule
1）Previously, the market was in a strong upward trend;
2）Three consecutive small positive lines appear, similar to the trend of the Red Three Soldiers;
3）Finally, there appears a large negative line that jumps short, opens high, and closes low, with the closing price below the opening price of the first positive line.

Psychological Analysis
The market operates in the original upward trend, which can be verified by the trend of the three red soldiers with three consecutive positive lines. On the the fourth day, the upward trend continued to rise, but suddenly a large number of profit plates poured out, causing the market to suddenly turn and develop in a downward direction. This day is also known as the "liquidation day". This strong turn greatly releases the energy of the bearish side in a short period of time, and after digesting these profit taking positions, the market can continue the previous upward trend with ease.

It should be noted that this form is suitable for situations where the previous upward trend was particularly strong, which is also in line with the commonly said "bull market often leads to sharp declines". In bull market situations, daily sharp declines often occur, all of which are concentrated profit taking.

Related Forms
The first three bullish targets on the third lineKThe line is similar to the trend of the Red Three Soldiers, but the difference is that there is an additional large negative line at the back that swallows up all the previous gains.

Practical Application

2019year2month12Opening price of RiGree Electric Appliances40.97Yuan, closed the day with a small positive line, and then continued to walk out of two small positive lines, closing on the third day42.25Yuan, the fourth day2month15After opening slightly lower, the market continued to decline and closed lower3.79%Report40.65Yuan, lower than the opening price on the first day40.97Yuan, taking back all the gains in the previous three days and continuing its upward trend thereafter4month19Daily Creation19Annual high price point63.90Yuan.

What is slightly lacking in this case of bullish third line direct attack is that the market opened slightly lower on the fourth day rather than continuing the previous rise.

***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.