Maybe, just maybe?......A “shakeout” refers to a sudden and...

Maybe, just maybe?......

A “shakeout” refers to a sudden and sharp decrease in the price of a stock or market, followed by an equally quick recovery. The shakeout phenomenon is characterized by the initial plunge in the stock, which causes panic selling among inexperienced investors or “weak hands”. Shakeouts can occur due to various factors such as negative news, economic uncertainty, geopolitical events, a “fat finger” (accidental trade), or for no reason at all (the market is the master manipulator).

Regardless of the reason, shakeouts tend to have three key traits, including:


· A Wide Price Range: The price spread (low and high of the day or week) should be the widest in months.

· Heavy volume: Because inexperienced investors puke their shares and savvy investors use the flush as an opportunity to scoop up shares at a discount, volume should be well above the average.

· Engulfing Candle/Undercut: A shakeout is incomplete until the price undercuts a critical zone, such as a recent range or moving average.

Let's see what tomorrow has installed for CHN followers?