Today's video is a special feature following up on the Software group stocks progression over the last month since I last covered the group in early August: Video: Software Stocks Group Focus – Stage 1 Bases Proliferate – 10 August 2022, as at the time, numerous stocks within the group were showing signs of Stage 1 base structures developing.
A key part of the Stan Weinstein's Stage Analysis method is both finding and then tracking stocks / groups as they start to show signs of developing Stage 1 base structures, so if you see a group chart developing in Stage 1, then the leading stocks in the group will likely already be breaking out and advancing in Stage 2. As the group chart is an average of the stocks within it, and so as with the Industry Group Bell Curve that I show most weeks, if the average is in Stage 1, then there will be outliers in Stage 2 and stocks still in Stage 4.
So it's important to start tracking groups as soon as fledgling Stage 1 bases begin to develop in leading stocks, while the rest of the group is still declining in Stage 4, as they indicate the first signs of the basing process and potential shift towards Stage 1, and eventually Stage 2. The early leaders bases often fail to fully develop and breakdown in Stage 4 once more, if the market Stage 4 downtrend is too strong. But then the process begins again. As in order to catch leaders at their ideal entry points in late Stage 1 or in early Stage 2. You need to be tracking them early as those bases start to develop.
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Disclaimer: For educational purpose only. Not investment advice. Seek professional advice from a financial advisor before making any investing decisions.