How should one select and execute buy and sell points for stocks?

I. Buy Point Selection: Seeking Entry Timing with 'Low Risk and High Potential' The core of a buy point is purchasing when the stock price is below its intrinsic value or when a trend reversal is imminent—validated through multi-dimensional signals to avoid chasing highs or bottom-fishing traps. 1. Technical Analysis: Capturing Trend and Reversal Signals Technical analysis uses price movement, volume, and indicators to gauge market sentiment and trends, serving as the most common tool for identifying buy/sell points. Moving Average System: When a short-term moving average (e.g., 5-day or 10-day) crosses upward above a long-term moving average (e.g., 20-day, 60-day, or 200-day), a 'golden cross' forms—considered a buy signal. For example, a bullish crossover of the 5-day MA above the 20-day MA indicates strengthening short-term momentum; reliability increases further if accompanied by rising volume. MACD Indicator: A buy signal occurs when the MACD line (fast line) crosses upward above the signal line (slow line) and the histogram shifts from negative to positive. Additionally, a 'bullish divergence'—where price makes a new low but the MACD histogram does not—suggests waning selling pressure and a potential bottom. KDJ Indicator: When the KDJ value falls below 20 (oversold zone), and the J-line crosses upward above both the K- and D-lines ('golden cross'), it signals a buy opportunity. A 'bullish divergence'—price hits a new low while KDJ does not—is even more reliable. BOLL Indicator: When the BOLL bands shift from contraction to upward expansion (upper, middle, and lower bands all trending upward), it signals entry into an uptrend—ideal for medium- to long-term buying. Alternatively, a bounce off the lower BOLL band accompanied by rising volume serves as a short-term buy signal. Volume–Price Relationship: Sustained price increases alongside rising volume ('price and volume rising together') indicate strong buying demand and trend sustainability—a valid buy signal. Conversely, shrinking volume during price declines ('low-volume bottoming') followed by a 'volume surge on price rise' suggests exhaustion of sellers and renewed buyer interest—offering an excellent bottom-fishing opportunity. 2. Fundamental Analysis: Identifying 'Undervalued' Stocks Fundamental analysis evaluates long-term investment value via corporate health, industry dynamics, and macroeconomic conditions—suited for medium- to long-term investors. Corporate Financial Health: Prioritize companies with consistent revenue growth, stable net profit growth, reasonable debt-to-asset ratios (e.g., 20% YoY net profit growth and positive operating cash flow reflect sound operations and underlying buy value. Valuation Metrics: Assess valuation using P/E and P/B ratios. A P/E ratio below the industry average (e.g., 15× vs. industry average of 20×) or a P/B ratio under 1.5× (i.e., trading below book value) suggests undervaluation and potential upside. Industry Trends: Focus on high-growth sectors (e.g., AI supply chains, new energy, biopharmaceuticals in 2025). Stocks in such industries often benefit from structural tailwinds—for example, EV penetration rising from 10% to 30% lifts both earnings and share prices of industry leaders like CATL and BYD. Macroeconomic Environment: Favorable conditions—such as robust GDP growth (≥5%), easing monetary policy (e.g., central bank reserve requirement cuts), and supportive government policies (e.g., new energy subsidies, innovation incentives)—generally lift overall market sentiment and create favorable timing for stock purchases.

What fundamental truths has stock trading taught you?

By extension, for market manipulators ('zhuangjia'), their greatest loss occurs when they themselves absorb shares from other holders at prices they themselves set. Their maximum gain arises when they sell large quantities of low-cost shares to retail investors. Under such manipulation, no matter when retail investors enter the market, the manipulator profits regardless—while the only way a retail investor can profit is by finding the next gullible buyer. Thus, in practical terms, virtually any so-called 'trading method' touted to retail investors is pure nonsense. Does this mean it’s impossible to profit in the stock market? Not at all. Some people genuinely do make money there. So who are these individuals—and what enables them to succeed consistently? Of course, luck plays a role—but over the long term, those who sustainably profit share two key traits: they do not chase excessively high returns, nor do they insist on making money quickly. Take legendary investor Warren Buffett as an example: his average holding period for any stock exceeds eight years, and his typical annualized return hovers around 20%. Therefore, to truly profit in China’s stock market, one must possess sufficient patience and a sound understanding of wealth accumulation. After all, markets—over the long run—cannot decouple from underlying economic fundamentals. And China’s economic fundamentals imply annual growth of roughly 7–8%. This is precisely why Guo Shuqing, former Chairman of the China Securities Regulatory Commission (CSRC), advised: 'Low-income individuals should avoid investing in stocks; it is not advisable for low-income groups or retirees relying on pension income to participate.' For such groups, stock investing is unlikely to bring sudden wealth—and may even trigger catastrophic losses. Finally, here are fifteen practical techniques distilled from my own experience and insights shared by seasoned traders: 1. Once you identify a stock you like, initiate a 25% 'base position'—never overcommit initially. 2. If the stock falls 10%, add another 25%—lowering your average cost and expanding profit potential upon rebound. 3. After holding, consider partial profit-taking once the price rises over 10%, locking in gains and mitigating drawdown risk during market corrections. 4. For stocks you strongly believe in long-term, adopt dollar-cost averaging: invest a fixed amount monthly to smooth out volatility and reduce timing risk. 5. Ahead of dividend payouts, consider increasing your position if the stock price is relatively low—capturing both capital appreciation and dividend income. 6. Monitor price action around earnings announcements; if results beat expectations yet the stock hasn’t rallied significantly, it may present a timely buying opportunity. 7. Use technical analysis: buy modestly when price breaks above a key resistance level—riding the momentum. 8. After panic-driven selloffs, if fundamentals remain intact and the stock trades near historical lows, treat it as a high-probability buying opportunity. 9. For cyclical stocks, accumulate positions during industry troughs—positioning for gains as the sector recovers. 10. Ahead of ex-dividend/ex-rights dates, if the stock dips due to anticipated adjustments, consider adding exposure—anticipating post-adjustment rebound. 11. Watch volume patterns closely: surging volume at low price levels may signal institutional accumulation—warranting consideration for entry.

Sasol hit by 20% drop but analysts flag buying opportunity

Jun 22, 2026

Sasol's share price fell 20% amid easing Middle East tensions and falling Brent crude prices, though analysts view this as a buying opportunity driven by strong free cash flow and debt reduction plans.

Moneyweb

2026-04-10

Sasol Shares Rise 5.8% Amid Mixed Analyst Sentiment

2026-04-13

Sasol Ltd. (SSL) falls 8.4% as energy stocks lose momentum

2026-04-18

Sasol Ltd (SSL) Stock Down 7.3% but Still Overvalued -- GF Score: 61/100

2026-04-22

Sasol Ltd (SSL) Shares Surge 3.5% -- What GF Score of 61 Tells Investors

2026-04-29

Sasol Ltd Shares Rise 4.7% Despite Overvaluation Warning