In-depth analysis of the rebound after a break, with reduced volume retracement to confirm the breakout point for catching explosive stocks!

Hello everyone, this weekend there are four classic limit-up stocks that I have shared before. They are still very popular and all are within our system. Congratulations to friends who have persisted—you’re eating big gains. Our trading system: break limit-up stocks with volume rebound, focus on core themes and mainline logic prediction, and be good at locking in market core directions in advance. In practice, we skillfully use strong tactics such as large-volume shadow reversals at limit-up, large-volume positive and negative signals, and limit-up break reversals to precisely capture early-stage stock opportunities. We have a self-developed framework for analyzing volume-price relationships during break limit-up and rebound, which can clearly identify key cycle points such as stock initiation, shakeouts, pullbacks, and acceleration from dimensions like volume, chips, and patterns, enabling us to plan ahead and follow the trend. We adhere to a patterned, systematic approach to strengthen stocks, focusing on capturing main upward waves and using practical systems to grasp trend markets. [Taoguba]

This issue provides an in-depth analysis of the stocks “Hanlan Co., Ltd.” and “Jinniu Chemical,” which I have shared multiple times. It explains what a break limit-up with volume rebound shakeout is, the logic behind pullbacks after shakeouts, confirmation, and acceleration. Hanlan Co. from January 16 to February 26, 2026, went through its first wave of initiation → divergence at limit-up → rebound and repair → low-volume shakeout → second wave with doubled volume for acceleration → high-level limit-up → three days of reduced volume shakeout → third wave of acceleration. This is a textbook case of a strong stock’s “divergence-shakeout-initiation-divergence-shakeout-acceleration” cycle.

We previously experienced two waves with this stock. Those who sold early last week probably missed the current three consecutive limit-ups, but many colleagues persisted through four days of shakeout and finally saw three limit-ups again this week. After the Spring Festival, they’ve already gained seven limit-ups, with their accounts nearly doubling.

(Hanlan Co.’s volume rebound at limit-up, volume reduction for pullback shakeout, and re-acceleration with doubled volume process)

Details of Hanlan Co.’s volume rebound at limit-up, volume reduction for pullback shakeout, and re-acceleration with doubled volume:

1. Why confirm it as a shakeout? First, after point A is volume-rebound repaired, the upward move of this thick film is not accompanied by volume, indicating that the main force cannot exit, as seen from the support situation.

2. At this point, the fourth day after volume rebound at point A, there was no acceleration. We observed that on the seventh day, the stock broke below the 10-day moving average and also below the lowest price of point A. This is a common bottom-fishing behavior during shakeouts, where the stock often breaks the bottom to shake out weak holders. Previously, we mentioned that breaking the bottom often results in a quarter-scale volume reduction for shakeout. Before point B, the main force shrank volume to a limit-up, and at point B, it again doubled volume to stay above the 5-day moving average and above the top of the A point’s real body, marking the main force’s initiation point. If during the business aerospace period, with sector sentiment, it would typically not take about five days for a pullback confirmation; usually, it starts with a one-day doubled volume, and within two days, a volume-reduction pullback indicates the continuation of the second wave.

3. When point E hits a limit-up again with doubled volume and closes above the top of point A’s real body, it is an ideal entry point.

Hanlan Co.’s third wave: the main force broke the limit-up for three days with rapid volume reduction to half, then pulled back to the 10-day moving average, combined with current hot themes like AI, smart grids, and ultra-high voltage concepts, directly accelerating into three limit-ups. Personally, I was waiting for the pullback to the 10-day line and then a doubled volume for about five days, but I was busy with oil stocks this week and missed this wave. No one entered the three-limit-up at the first or second wave, and the third wave had little cost-effectiveness. The characteristic here is that “trend stocks,” with theme support, tend to stabilize at the 10-day line and accelerate again.

Similar institutional large-cap stocks usually stabilize around the 20-day moving average, following a trend. You can verify this logic with two stocks that stabilized at the 20-day line.

Jinniu Chemical’s large-volume positive shakeout:

On February 27, it was seen as a pullback, right at the 5- and 10-day moving average convergence point, and it is a methanol concept stock. Unexpectedly, it started with two straight-up limit-ups.

Many good stocks in the market are currently in the shakeout phase after break limit-up, having gone through two weeks of Spring Festival shakeouts. Most are ready to move, and opportunities will be good starting next week. We already have two stocks pre-positioned with bottom positions.

(Zhuolang Intelligent’s limit-up with volume reduction shakeout, short shakeout, volume reduction pullback, and re-acceleration with doubled volume)

Taihao Technology’s break limit-up with typical volume reduction rise (compared to the divergence volume of the largest shadow), again volume reduction to the top of the large-volume negative signal and the 20-day moving average. At point Y, volume shrank to a quarter of the previous volume, indicating high control by the main force. This is quite aggressive; during the business aerospace period, Shunhao Co. also went through a phase like this, stabilizing at the 20-day line for the second wave. Such volume reduction rebound, volume rise, and subsequent volume reduction pullback to the 20-day line, then stabilizing again, are worth paying attention to.

Dongcai Technology’s trend wave: observe the timing of doubling volume after stabilization at the 20-day line.

Summary of core logic and details of break limit-up shakeouts:

1. Divergence at break limit-up: volume as a benchmark, stable price as a sign of shakeout

Volume on the break day should be 1.5-2.5 times the previous day, turnover 10%-18%, indicating healthy divergence volume; the stock closes positive or fake negative, not breaking below the 5-day moving average, with net inflow or slight outflow of main funds, no signs of panic selling. Break limit-up is mainly the main force releasing profit-taking, not dumping. Excessive volume (over 3 times) suggests potential distribution; insufficient volume (<1.5 times) indicates incomplete divergence, with subsequent upward pressure high.

The volume on the break day serves as a divergence benchmark; subsequent shakeouts and initiations can be referenced against this volume.

2. Rebound repair: weak to strong confirmation, locking in long positions

The next day, volume rebounds at the break limit-up with the real body or high point, slightly exceeding the break day volume, completing divergence correction and confirming the main force’s presence, restoring market sentiment.
A rebound within 1-2 days after the break is a strong repair; if it takes more than 3 days, the strength weakens, indicating only a rebound. Pay attention to the strength of the rebound, as many articles have discussed before.

3. Low-volume shakeout: false break + extreme volume reduction, exhaustion of selling pressure

After rebound, the stock intentionally breaks down to create panic, with volume shrinking to 1/5-1/4 of the break day, resulting in a “ground volume,” indicating that floating chips are leaving and selling pressure is exhausted. Main force remains holding positions.
If the breakdown does not effectively break below the 10/20-day moving averages or previous support levels, it’s a false break.
When low volume appears, it often signals the end of shakeout; the longer the low-volume period, the stronger the control by the main force.
Low volume = a sign of shakeout ending; a breakout with doubled volume afterward confirms the start.

4. Doubling volume initiation: breaking through divergence volume real body, confirming main upward move

After low volume, a doubling volume (≥2 times) positive day breaks above the upper part of divergence volume real body, volume and price resonate, main force absorbs remaining floating chips, and accelerates upward.
Doubling volume should be accompanied by a limit-up or large positive candle, with turnover of 5%-10% (healthy acceleration); after breakout, a volume reduction pullback that does not break below the breakout level indicates a continuation of the trend.
Breakout with doubling volume at divergence high confirms initiation; pullback without breaking the breakout level indicates trend continuation.

5. Stock selection prerequisites

Leading stocks in mainstream sectors, policy/event-driven, high market recognition (e.g., Hanlan Co. with ultra-high voltage theme).
Multiple moving averages (5/10/20 days) aligned in a bullish pattern, clear upward trend, no signs of high-level stagnation.
Before break limit-up, main force shows continuous net inflow, with resonance from top brokerage firms and retail funds, and no large-scale distribution.

6. Four-step operation nodes

1. Tracking: mark divergence day at break limit-up, note volume and real body high points as benchmarks, watch for next-day rebound.
2. Waiting: after rebound, volume reduction shakeout, wait for low volume (1/5-1/4 of break volume), avoid early bottom-fishing.
3. Entry: after low volume, breakout with doubled volume above divergence high, confirm with limit-up or large positive candle (first buy point); volume reduction pullback below breakout level (second buy point).
4. Risk control: set stop-loss 3% below breakout level; if volume surges and breaks below the 10-day moving average after high-level break, exit immediately.

3. Core distinctions between shakeout and distribution (key to avoiding traps)

Shakeout: volume reduction decline, low-volume bottom formation, quick recovery after breakdown, locking in bottom chips, small fluctuations in main funds.

Distribution: volume surge decline, sustained high volume, failure to recover after breakdown, chips moving upward at the bottom, continuous net outflow by main force.

Divergence is an opportunity; low-level break limit-up is not a top. Healthy divergence + rebound repair is a prerequisite for the second wave. Do not panic and sell. Volume is core; low volume confirms shakeout, doubled volume confirms initiation. Use break limit-up volume as the only reference, avoid subjective judgment. Rhythm is key: first wave for accumulation, second wave for main rise, third wave for quick exit. The second wave offers the most stable gains; the third wave is quick in and out.

Break limit-up and rebound can be used at different stages. The week of March is when many leading stocks are in the early shakeout phase. The recent sharp declines are essentially digging a “golden pit.” After reviewing recent patterns, there are still quite a few.

That’s today’s sharing. I noticed previous articles lacked popularity; I hope everyone cherishes this. Such articles will not be easy to find for free again, and reading them ten times is not enough. Without practice and verification over more than two months, you cannot become proficient. If you like, I suggest everyone calmly focus and maturely apply these methods.

These are my personal insights and analysis. Wishing everyone success in understanding and applying!