II.23. Determining the trend breaking point.

To use the money accumulated from the growth of shares, you need to exit the transaction and withdraw money from the exchange. The higher the price, the more market participants will want to lock in profits. Actually, over time, this first causes a slowdown in trends, and then their reversal, since a decrease in price or even the absence of price movement upwards for a long period of time brings losses and disappointment to market participants.

Consider as an example the reversal of the trend in APPLE Inc. shares (Fig. 95).

Fig.95. Apple Inc. stock. At point 1, a steady upward ascent of the price begins. In volume 2, the first major profit-taking takes place. From T.2 to t.3, the slope of the price ascent becomes less steep, which indicates an increasing presence of those who want to fix profits and leave the “ship on time”. In volume 4, after the next fixation, a new accumulation of positions is formed, the price does not fall, which involves new participants, causing growth to point 5, where a new profit fixation occurs. There is no sharp drop in the price, because someone is gaining a new position in volume 6, causing the price to rise to volume7. Profit-taking begins, which causes growth to slow down to t.8 and positions to reset to t.9. The price becomes interesting again and the cycle of position recruitment is repeated, increasing due to the involvement of more and more new players attracted by the high price. In volumes 10 and 11, we see that the high price also attracts large capital that was previously purchased at points 1,2,3,9, etc. and is now ready to sell shares. There is a trend reversal.

Fig.96. EURRUB chart. There is no trend. Figure 96 shows a situation where there is no trend between points 1 and 2, but there is a long flat, squeezed between the prices of 80 rubles from the bottom and 95 rubles from the top for the period from July 2020 to February 2022. You can’t look for a trend reversal here.

Fig.97. Gazprom JSC action. In Fig. 97, let’s pay attention to how carefully the end of the downward movement of the Gazprom JSC stock is masked to the left of point 1. It is possible to see the beginning of the reversal only 1 month after point 1. The price growth continues to point 2, where the first profit-taking takes place, and from T.3 to T.4, a large capital position is being set for further growth to T.5. In t.5, another profit-taking occurs, the position is taken from t.6 to t.7, the market is released, tco gives rapid growth in the area from t.7 to t.8. There is a culmination of purchases with a long bar up and large capital begins to exit positions, bringing down the trend quite rapidly to T.9 and further down.

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