To determine whether the dog fund is engaging in 'baiting', it is necessary to consider the current market structure, technical indicators, and trading volume performance.
1. Baiting Concept: Baiting refers to the dog fund creating market panic through short-term price declines 📉, inducing retail investors to sell stocks in order to gather shares at lower prices, paving the way for subsequent price increases.
2. Trading Volume: During the dog fund's baiting, trading volume often sees a significant decline because it is merely pressuring the stock price and not truly offloading large quantities. If trading volume continues to increase during a price decline, it may indicate genuine selling rather than baiting. Additionally, if trading volume significantly increases during a price rebound, this may also be a signal of baiting, as collecting shares at low prices requires trading volume support.
3. Stock Price Position: If the stock price is already at a relatively low level and then experiences a sharp decline 📉 without any obvious negative news, it is very likely the main force's baiting behavior. Conversely, if the stock price is at a high level, a sharp decline is more likely to indicate a trend reversal rather than baiting.
4. Moving Average System: When the stock price is declining 📉 and finds support at important moving averages, quickly bouncing back could be a signal of the main force's baiting. On the other hand, if the stock price easily breaks below important moving averages without signs of a rebound, the likelihood of baiting is lower. However, it should be noted that the main force may also intentionally break the support of moving averages to create panic, so other factors should be considered in the judgment.
5. Technical Indicators: Some important support levels may be seemingly easily breached, but are quickly regained, which could be a baiting tactic. At the same time, attention should be paid to the divergence of technical indicators; if multiple indicators show synchronous divergence across various cycles, it may be a signal of baiting.
