What is the essence of weak-to-strong reversal? Two preconditions, two manifestation signs, one underlying logic, and one sustainability judgment.
Precondition 1: For consecutive limit-up stocks that broke their streak yesterday, there's potential for weak-to-strong reversal today - this is the most common scenario. For leading stocks, this would be the expectation of a rebound limit-up after the first bearish close.
Precondition 2: For consecutive limit-up stocks that closed at limit-up yesterday but with weak performance (either a "messy board" or huge volume - at least 5 times the previous day's volume, though standards vary), these are considered weak limit-ups and may reverse to strength the next day with another limit-up.
Manifestation Sign 1: Strong positioning! Weak yesterday but strong today - for example, if it broke the streak with a bearish close yesterday but opens 5% higher today, that's direct weak-to-strong reversal. Strong opening position speaks for itself - buy the dip during pullbacks or chase during upward momentum.
Manifestation Sign 2: Strong vector! The auction pulls upward at the last moment with two outcomes: direction changes from down to up, with large volume pulling it significantly above water. This is undeniably weak-to-strong reversal. In such cases, buy some during auction and more when it goes above water.
Underlying Logic: Weak-to-strong reversals exist because either big capital is self-rescuing, washing out positions, or short-term dominant players have changed.
Sustainability Judgment: Whether you can make big profits from weak-to-strong reversal depends crucially on whether the stock/sector still has growth potential and sustainable growth logic. If not, better to pass.
Summary: Master these 8 words for invincible weak-to-strong trading: contrast, strength, upward logic.