What Is Rebounding?

In the stock market, the stock price continues to fall. The adjustment phenomenon that the stock price reverses and rises to a certain level due to the rapid decline in the stock price is called a rebound. Generally speaking, the rebound of stocks is smaller than the decline. Usually, when the stock rebounds to about one-third of the previous decline, it resumes the original downward trend.

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[Term] rebound

meaning

The compressed spring bounces back; the moving object bounces back in the opposite direction after encountering an obstacle. ^[1]

Law of rebound transformation

The rebound may not evolve into a reversal, but the reversal must evolve from the rebound. However, there is only one bounce that can be turned into a reversal in a round of market declines, and the remaining multiple bounces will trigger a larger downtrend. Investors who rush to rebound for the opportunity of a reversal are often trapped in the mid-hills of the decline, so you must not take the rebound as a reversal.

Law of timing of rebound

You should wait patiently when buying and not when selling. The operation of grabbing a rebound is different from the operation in a rising market. In a rising market, it is generally necessary to wait for the end of the rally, and then sell the stock when the stock price has stopped rising and falling back. . In the rebound operation, we must emphasize early selling, and generally make a decisive profit after a profit.

Law of rebound decision

Investment decisions are based on strategy and supplemented by forecasts. The trend development of the rebound market is often not obvious. The development of the market has a large number of variables and it is difficult to predict. Therefore, participation in the rebound market should be based on strategy and supplemented by prediction. Strategies make buying and selling decisions without relying on predicted results.

Rebound elasticity

The stock market falls, as the ball falls, the harder the fall, the faster the rebound; the deeper the fall, the higher the rebound; the rebound in the slow overcast is often weak, lacks the value of participation, and is not operable; Sexual rebound and oversold rebound, because there is a certain rebound profit space, it has a certain participation value and operability.