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- The stock stopped falling. Naturally, a bottom requires that the stock stops falling in price and that some sort of base starts to form.
- As selling accelerated, volume started to rise significantly. Rising volume as a stock falls is often a sign that the selling is about to be exhausted as those trying to get out of the stock are in panic mode. Rising volume in a downtrend often means that a bottom is near. You get no guarantee that this is the way things are going to work out, but if you don’t notice the rise in volume and start thinking about it, then you’ll miss the turn.
- The stock started moving sideways, showing that the trend might reverse. When the stock starts moving sideways, draw your trend line and start looking for the stock to move above the downtrend.
- In March, the market bottomed. So did the stock, which moved above the down trend line. That was the buy point.
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