Thread by @swing_ka_sultan

Many people keep on wondering about stages- stage 1, 2 etc. I usually do not bother much. Reason is, I usually do not get a tradable setup with right entry without a stock being in a stage 2 advance.

I just follow 2-3 rules for quick analysis. Firstly, I do not buy any (1/n)

stock below its 200 DEMA. Not because this 200 DEMA rising for X no. of months will show me that the trend is established, but because it will provide resistance when the stock surges upwards.

2nd thing I like to see is volume. Stage 1 is neglected phase, except some core (2/n)

value investors and some stealth accumulation happening by institutions, not many people will be active there. So the activity is muted, and so is the volume. But no stage 2 can ever trigger WITHOUT CONSIDERABLE SURGE IN VOLUME. This surge will happen in overall volume (3/n)

activity, both red and green. Red will be less than green volume emerging in stage 2, but will still be higher than the volume we had seen in stage 1.

Now the 3rd point, if your stock surges above key moving averages, pulls back to EMA and take support there, this is a (4/n)

wonderful confirmation. This is the characteristic of a trending action. Why? The reason is moving average works as a self fulfilling prophecy. There is no other reason for the stock to get support at EMA than many people seeing and buying at it and institutions too (5/n)

is supporting the price at the EMA. Once you see this sign, you can go ahead with buying when the setup emerges.

A few days ago was reading @StocksNerd's wonderful thoughts on #StageAnalysis, so I too wished to share some of mine. I hope these will by helpful. (6/6)