Here is the translation of the provided content into English: "Change direction with the wind: Stock market practical skills"

Author: Yin Hong / Country: Mainland China
Publisher:
Publish Date: 2006-03-01
Features: In a booming market, market hotspots are vibrant and diverse, with new hot sectors emerging daily or even hourly. Short-term traders often follow the principle of sector rotation by chasing stocks in other sectors after selling one, achieving rapid and ideal gains. However, to keep pace with the market rhythm and seize every fluctuating hotspot, it is essential to strengthen stock selection preparation. Many investors only start selecting stocks when the market booms, and in the intense market fluctuations, they often lag behind due to insufficient preparation, always appearing half a beat behind the market. In reality, the prerequisite for accurately capturing individual stock opportunities in a booming market is to start preparing for stock selection in the weak market phase before the boom. Every market adjustment cycles a new bull market. Only by thoroughly understanding listed companies and actively selecting stocks before the boom can investors avoid chasing high and selling low in the booming market, running around in a frenzy, and instead navigate the market with ease. Therefore, investors must conduct extensive screening and selection of stocks before the market booms, choosing candidate stocks to build their own stock pool. When the booming market arrives, they can then select specific investment targets based on the distribution of market hotspots.
It should also be noted that to achieve ideal gains in a booming market, it is necessary to seize the leading stocks or a small number of highly correlated hot stocks. Only by selecting such stocks can investors achieve returns that outperform the market index. In a booming market, investors must dare to chase gains. For stocks with locked-limit-up boards, it is essential to remain bullish, as the limit-up indicates that bullish market forces dominate in the stock. Even when the limit-up is firmly locked, we can still have high expectations for the stock. However, if, after a period of continuous surges, the limit-up is repeatedly broken during trading and gradually becomes unsecured, investors should remain vigilant and pay attention to the risk of a top at a high position. This situation indicates that the major funds within the stock have differing views on its future performance, and some major funds are quietly exiting. Investors should be cautious and consider taking profits.
For example: Guangdong Power Co. () launched a limit-up rally on June 13, 2001, seemingly ready to break out into a bullish trend. P8