Updated Stage Analysis Methodology by Stan Weinstein based on Modern Markets
1. Start with the daily chart as your baseline. Use the daily chart to assess the stock’s short-term timing and breakout potential before moving to the weekly chart for confirmation.
2. Validate the setup with the weekly chart. Check for long-term support and resistance levels to identify clear uptrend potential and avoid significant overhead supply.
3. Avoid stocks that are extended. Do not buy stocks that have already moved significantly away from their base or breakout points, as they present higher risk.
4. Use gaps as confirmation signals. Look for upside gaps on strong volume as signs of institutional buying and increased demand for the stock.
5. Exit positions when the stock breaks the 50-day MA. When a stock breaks below its 50-day moving average, it signals potential weakness and the need to exit the trade.
6. Focus on Stage 2 stocks. Prioritize stocks that are in Stage 2 uptrends, as these have the highest probability of sustained price increases.
7. Be selective with sectors. Choose stocks within strong-performing sectors or industries that demonstrate clear group strength and avoid weak groups.
8. Monitor volume patterns. Watch for increasing volume on breakouts and decreasing volume during pullbacks, which indicate healthy accumulation.
9. Take incremental profits. Trim positions as stocks become extended, locking in gains and reducing risk while waiting for new opportunities.
10.Create a watchlist of potential setups. Continuously update a list of stocks forming strong bases or nearing breakout points to act quickly when the opportunity arises.
11. Don’t overcomplicate with indicators. Focus primarily on price action, volume, and moving averages instead of relying on too many technical indicators.
12.Adapt to modern market speeds. Be prepared to move quickly in today’s fast-paced market environment, taking action as soon as signals appear.
13.Use market breadth as a guide. Pay attention to the advanced-decline line and other breadth indicators to assess overall market health.
14.Treat gaps that aren’t filled as bullish. When gaps fail to close, it indicates strong support and often leads to further price increases.
15.Sell on clear warning signs. Look for signals such as failing rallies, downside gaps, and breakdowns below key moving averages to exit positions promptly.
1. Start with the daily chart as your baseline. Use the daily chart to assess the stock’s short-term timing and breakout potential before moving to the weekly chart for confirmation.
2. Validate the setup with the weekly chart. Check for long-term support and resistance levels to identify clear uptrend potential and avoid significant overhead supply.
3. Avoid stocks that are extended. Do not buy stocks that have already moved significantly away from their base or breakout points, as they present higher risk.
4. Use gaps as confirmation signals. Look for upside gaps on strong volume as signs of institutional buying and increased demand for the stock.
5. Exit positions when the stock breaks the 50-day MA. When a stock breaks below its 50-day moving average, it signals potential weakness and the need to exit the trade.
6. Focus on Stage 2 stocks. Prioritize stocks that are in Stage 2 uptrends, as these have the highest probability of sustained price increases.
7. Be selective with sectors. Choose stocks within strong-performing sectors or industries that demonstrate clear group strength and avoid weak groups.
8. Monitor volume patterns. Watch for increasing volume on breakouts and decreasing volume during pullbacks, which indicate healthy accumulation.
9. Take incremental profits. Trim positions as stocks become extended, locking in gains and reducing risk while waiting for new opportunities.
10.Create a watchlist of potential setups. Continuously update a list of stocks forming strong bases or nearing breakout points to act quickly when the opportunity arises.
11. Don’t overcomplicate with indicators. Focus primarily on price action, volume, and moving averages instead of relying on too many technical indicators.
12.Adapt to modern market speeds. Be prepared to move quickly in today’s fast-paced market environment, taking action as soon as signals appear.
13.Use market breadth as a guide. Pay attention to the advanced-decline line and other breadth indicators to assess overall market health.
14.Treat gaps that aren’t filled as bullish. When gaps fail to close, it indicates strong support and often leads to further price increases.
15.Sell on clear warning signs. Look for signals such as failing rallies, downside gaps, and breakdowns below key moving averages to exit positions promptly.
Link: Stage Analysis in Modern Markets - Exclusive Interview with Stan Weinstein
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