When we should buy or sell?
After reviewing the historical index trend, it is easy to find that "Double Bottom" pattern appear most of the time and it is a very important signal to determine buy-order timing. On the contrary, if this pattern fail and the stock market ,which is already at the second bottom, keep falling, it will cause another huge fall and people will be frightened of it.
At this moment, given that RSI of HSI is near 30 and Dow' index almost hit 20000, HSI is at the position of the second bottom. Normally, it means it is a good time to buy stock and i should try to buy more and more. However, I feel frightened whole day as I think it is highly possible that the second bottom is not a strong supporting position and so the market will fall easily with the aid of Dow's failure to hit 20000.
So, I decide to sell more stock to have a felling that i am at a safe position. At this moment, my stock-cash ratio is 30:70. I am going to increase the cash ratio to around 75-80% and hopefully this fall will not bring me to lose more than 10 thousands. After selling, what I am looking for is, of course, another second bottom pattern.
Technical analysis
HSI RSI: 34.3
C:B ratio: 60:40
Dow's index: 19843
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