[Red Envelope] How to identify weak to strong, and what is divergence turning into consensus?

[Guba]

【Main Text】

For breakout players, recognizing “weak turning strong” and “divergence turning into consensus” is key to capturing the core buying points of leading stocks. This is not only about technical patterns but also a game of market sentiment and capital attitude.

To identify weak turning strong, we first need to understand what is weak and what is strong. Simply put, “weak turning strong” essentially means an unexpected performance. That is, the stock shows weakness (divergence) the day before, but opens or trades strongly the next day (agreement). Below are specific identification methods based on mainstream market logic:

Note: There are few charts. If you need visual understanding, it’s recommended not to blindly engage in ultra-short trading for now!

1. Recognizing what is “Weak”

“Weak” indicates divergence and loosening of chips the day before. This is the foundation for “turning strong.” There are many weak patterns; for short-term traders, common “weak” states include:

1. Breaks in the board: Fails to continue the consecutive limit-up streak, resulting in a break and a green close or sharp decline.

2. High-level volume stagnation: Long upper shadows or large bearish candles with significantly increased volume, showing heavy selling pressure.

3. End-of-day sneak attack or rotten board: Although hitting the limit-up, repeatedly breaking the limit, and only barely closing the gap at the end of the day, indicating fierce battle between bulls and bears.

2. Recognizing what is “Strong”

Next, let’s understand what “strong” means. “Strong” indicates decisive capital attitude, exceeding market expectations of the previous day’s weakness. Mainly divided into pre-market and intraday signals:

1. Pre-market signal: Stronger in the auction phase;
Unexpected high open: The most direct signal. If the previous day was weak or broken, the normal expectation is a low open, but if the next day’s auction opens 2%-5% or higher with a surge in bidding volume, it’s a classic weak-to-strong signal.

2. Intraday momentum shift

If the opening isn’t very strong (e.g., flat or slightly down), confirmation can be made through intraday trend:

Quick turn red: Price quickly rises after opening, moving away from the cost basis, and stays above the intraday moving average (yellow line).

When weak isn’t weak: If the previous day was rotten or broken, normally there should be a correction the next day, but if the stock opens higher instead of lower, or even hits the daily limit within half an hour, it shows strong performance with sufficient auction volume and rapid price surge.

Volume shrinkage during pullback: During the rise, if volume significantly decreases during pullbacks, it indicates low selling pressure and high control by the main force.

3. Core Logic: Divergence turning into consensus

“Weak turning strong” is a process; “divergence turning into consensus” is the result.

Divergence manifests as wide-range fluctuations in price, sharply increased volume, fierce collision of bullish and bearish views, and ample chip exchange.

After divergence ends, bullish funds dominate, reaching consensus, and the stock price surges strongly. Volume may even shrink relatively because holders are reluctant to sell, and outside funds rush in.

4. High-probability patterns and entry timing

Break and rebound:
When a stock breaks the board mid-consecutive limit-up and closes lower, then opens high the next day and quickly hits the limit-up again, forming a rebound.

When auction volume is high and meets standards, try to catch the move, or enter during intraday confirmation of limit-up.

Rotten board reflow:
A stock that was rotten the previous day, but opens higher than expected the next day with good reception after opening. After 9:25 during auction, if volume and price match, you can aggressively enter; or wait for half an hour after opening to confirm strength before entering.

Intraday crossing the tribulation:
A rotten board the previous day, but the next day opens lower at auction, then quickly turns red and hits the limit-up after opening.

Observe intraday support, wait until the price stabilizes above the moving average and volume surges before low buying.

5. Risk control

Not all weak-to-strong signals are worth participating in. Be cautious in these situations:

1. Major divergence days: If market sentiment is retreating or there’s a large divergence day, success rate of weak-to-strong is very low.

2. Direct one-word limit or near limit-up at auction: Expectation is fully priced in; after opening, it’s prone to breaking limit and falling back, high risk.

3. Weak-to-strong strategies are only suitable for core main lines or sector leaders; follow-up stocks are more likely to fail.

4. Set stop-loss: If the move doesn’t meet expectations and breaks below the stop-loss line or key support moving averages, exit unconditionally to avoid deep losses.

(Above is a general summary of weak-to-strong; specific operations depend on detailed market conditions, personal understanding, and intuition. Novices should not blindly follow without experience.)

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【Important Disclaimer】: The above is only a sharing of ideas and does not constitute investment advice. The market carries risks; invest cautiously!