KLine Analysis Lesson 17: Hammer Line of Inverted Form

Starting from this lecture, we will continue to introduceKThe second part of Line Refinement Analysis - Reverse Form. The order in which forms appear does not represent the strength of the form reversal signal, but is arranged according to the daily frequency of these forms from high to low.

Identifying persistent patterns is important, as we can increase profits by identifying the persistence of a bull market and reduce investment and losses by identifying the persistence of a bear market. However, identifying the reversal pattern is more important. It should be noted that the investment philosophy of the bull bear market is completely different: if we can identify the bull bear transition in advance, we can avoid being stuck on high mountain peaks and constantly hoping for the climb after the adjustment is over, and successfully defend our victory; If we can identify bears turning into cattle early, we can also lay out early and buy more chips at lower costs, enjoying more profits. When the stock price starts to rise, there is no need to hesitate whether to chase up and buy, and the mentality will also be more calm.

Recognition Rule
1）Previously, the market was in a downward trend;
2）Afterwards, there appeared a very short entity with a long shadow lineKThe length of the shadow line is almost the length of the solid2~3Times or more;
3）KThe color of the line entity is not important, which means it can be a positive or negative line;
4）KLines should not have overhead lines or even if there are overhead lines, they should be very short;

Psychological Analysis
The market itself is in a downward trend, and after the opening, the market continues to be in a downward state. As selling continues to pour out, the stock price drops sharply for a while. Afterwards, selling gradually begins to decline, and buying gradually takes a dominant position, driving prices up and closing at the higher price of the day. If the closing price is higher than the opening price, the hammer line of the red entity indicates a stronger bullish signal in the future. Of course, we also need to compare and verify whether there is a higher opening price and a higher closing price the next day to confirm whether the downward trend has truly been reversed.

Related Forms
In the first lecture of the technical analysis service package“KThe lower cross line appearing in the "basic form of the line" is actually an extreme case of the hammer line, but the physical part has almost disappeared and the opening and closing prices are the same.

Practical Application

2019year1month31On the day, Fenghua High Tech saw a hammer line after a continuous decline, with an opening price of10.10Yuan, closing price9.92Yuan, the lowest price of the day9.56The length of the shadow line is almost the same as the length of the entity2About times, it is considered a hammer shape that meets the minimum form standard. Afterwards, the downward trend was reversed and an upward trend began.

***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.