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The largest opportunities for profits in the stock market come when stocks suddenly plummet during a crash. Investors who buy these large dips often walk away with outsized gains that significantly beat the market for the year. In order to do this successfully, though, investors must know how to identify a bottom in the market properly. Here are three of the best methods for recognizing a market bottom.

Watch for Early Signs of a Rally

The end of a drop is also the beginning of a rally. As a result, one of the best ways to identify the bottom of a given stock’s price is to look for the early signs that it’s about to rally. The first day that a stock or index doesn’t hit a new low is a good indicator of a possible upswing. However, it’s a good idea to wait for one day of significant gains, since this will signal a rally that has some strength behind it. False starts sometimes happen before stocks truly rally, so it’s best not to rely on a single day of slightly increased prices.

Watch a Long-term Moving Average

Moving averages convey a great deal of useful information about general trends in the market. If a bear market is in place for a long period of time, longer-term moving averages are among the best technical indicators to watch. An increase in the 200-day moving average, combined with consistently higher low points, is a very strong signal that the market has found its bottom and is beginning to rally.

Learn to Love the Baltic Dry Index

If you’re looking at large indices or the market as a whole, a somewhat obscure index called the Baltic Dry Index can be one of the best indicators to watch. The Baltic Dry Index is a listing of the shipping costs of raw materials that go into making everything from consumer goods to heavy industrial equipment. As a result, upward movement in the BDI signals an increase in consumer and producer demand and points to improved market conditions. It’s important to recognize that the BDI isn’t especially effective for analyzing individual stocks, but it provides useful trend information about the market as a whole.