A Stock Selection Standard That Outperforms Market Turning Points

Trading stocks requires focusing on strong performers, but many investors struggle to identify them. A selection standard based on outperforming market nodes can help. Below are the key criteria:

1. Timing Is Everything

The core of this method is selecting the right entry time by assessing:

• Market conditions (via moving averages, volume, P/E, and P/B ratios).

• Individual stock timing (combining thematic trends and price levels).

2. Identify Key Market Nodes

Historical analysis shows that market downturns begin at critical nodes, such as:

• The peak of a major bearish candlestick (e.g., early-year plunges).

• Declines are the ultimate test of a stock’s relative strength.

3. Stocks Outperforming the Market

After locating market nodes, target stocks that:

• Recover faster than the broader market.

• Break past previous highs ahead of peers.

4. Fundamental Strength

Stocks with strong earnings and:

• Sharp short-term rallies.

• Bullish K-line patterns (e.g., Morning Star, Single Yang Unbroken).
  These often lead market rebounds during crashes, offering high returns.

5. Oversold Daily K-lines

Finally, prioritize stocks with severely oversold daily K-lines (e.g., steep drops far below MAs), as they tend to form V-shaped reversals.