[isatrader]

Time for another quiz question for you to have a go at. I've attached is a mystery chart with a set of questions for you to answer, and I'd encourage you to elaborate if you can as it helps in analyzing the Stage.

1. Is price above a flat, rising or declining 30 week MA?
   
2. What is the volume doing?
   
3. Is the relative performance versus the S&P 500 above or below the zero line?
   
4. Is the relative performance zero line itself down, flattening or rising?
   
5. Is there significant near term resistance?
   
6. What is the Stage of this stock?
   
7. What is the Stage of the Sector chart?
   
8. What is the Stage of the S&P 500 chart?
   
9. Would you buy this stock? Explain your reasons of what you would do.
   

Thanks to Malcolm for attempting the chart quiz and his excellent analysis of the mystery chart. I don't think I need to add much to his analysis as it covered most of the points very nicely, so I've marked up an up to date chart of the stock, which was AVD (American Vanguard) which is in the $DJUSCX (Specialty Chemicals) sector, and I've highlighted the point that it was at on the previous chart I showed for you to analyze with a vertical grey line, so you can see what happened next to the price and the relative performance and volume.

AVD was below a declining 30 week MA with around average volume for it. The relative performance was weakening below a flattening zero line, and it had formed some near term resistance with a number of lower highs and was testing the lows of the Stage 3 range which had been forming for six months. And hence it would be given a Stage 3B rating, which means late in Stage 3 as it had become increasingly toppy, and so if you were still in it then you should use rallies for at least partial selling at that Stage.

Nine weeks later it broke down into Stage 4A, after first rallying back up to the declining 30 week MA and rolling over. Now almost a year later it's still in Stage 4 and has formed a much larger head and shoulders top, which if it makes a further Stage 4 continuation breakdown below the major support that's formed, it would move into a more serious Stage 4 decline with no support until around the mid teens, although that's quite old now.

Below is the marked up charts.