Two Types of Surprising Trends During Extreme Market Conditions

Selecting stocks during extreme market conditions is often a major challenge for retail investors. However, even in a severe market downturn, certain stock-picking techniques can still yield profits. Today, the editor of Winner’s Academy shares two types of surprising trends that can emerge during extreme market conditions, hoping to provide valuable insights.

During extreme market declines, investors should focus on stocks exhibiting independent trends. Why? Because independent trends often indicate counter-trend rallies, making such stocks potential surprises. When the market crashes, pay close attention to stocks displaying the following two characteristics.

1. Stocks Remain Resilient While the Index Plummets
When the index experiences a sharp drop, these stocks do not fall but instead show strong resilience. These are not necessarily limit-up stocks but rather those that still offer entry opportunities, which may yield better profits.

The trend of such stocks is relatively stable—they may pull back during a market crash but do not break key levels, maintaining a bullish alignment with more positive than negative sessions. Although their gains may be modest, they rise steadily under the radar, avoiding excessive market attention. Such stocks are suitable for swing trading strategies due to their strong resistance to declines, small market capitalization, and active trading nature.

2. Stocks That Pull Back with the Market, Briefly Break Key Support, but Recover Above It by the Close
These stocks follow the market downturn and may temporarily break below critical support levels during the session but manage to close above the support line by the end of the day. Clearly, such price action is also worth monitoring.

If a stock continues to decline during the day but then stages an unexpected rebound, it becomes less suitable for selection. Such stocks are either already rebounding or on the verge of doing so. Without considering other factors, if you are unfamiliar with the stock, it is not ideal to pick during a broad market rally. Rallies are rarely sustained, and the subsequent trend is likely to diverge.

The commonality between these two trends is their counter-trend nature. Therefore, during extreme market conditions, investors should watch for these two types of stock movements. If you’d like to learn the basics of stock K-line charts, feel free to click for more details. Wishing everyone a strong start to the week!