[isatrader]

Hi all, I wanted to start going through loads of charts to get an idea as to my ability to gauge its stage.
I've attached a chart of the FTSE electricity sector as there are a few similar to this where there doesn't seem to be a discernible shift from stage 2 to 3 and then 4

Basically, is my analysis correct.
I would view this as still within a stage 3, mainly because the shift from stage 2 was far too sharp. The cloud was broken whilst the SMA was still going up. Had we been long, we would now have been stopped, so to move from a 2 to 4 seems too sudden.
Not unheard of I guess, but what's your take on this.

If you look at its constituents (just 2 fortunately) one is stage 2 and one is in stage 4 so a 3 would seem the best bet? Until something more concrete develops and leave this alone until such time...

Hi malaguti, I've marked up the chart of how I interpret the last five years. It's a big chart, as I only normally have two and half years in view on a weekly chart, as you can go through the Stages a few times in a couple of years. So five years is too long to look at on a weekly chart imo, and so I'd suggest using a monthly chart for time periods over 3 years in combination with a two to three year weekly chart. A daily chart used in combination with the weekly chart will also really help you define the Stages, as for example when you have a swing low below the 200 day MA, a breakdown below that is generally the Stage 4A breakdown point, although you do get earlier breakdowns too. But as a general rule, if it breakdowns below a significant swing low that's also below the 200 day MA, then it's very likely to be moving into early Stage 4A. Have a look at a daily chart of this for the last year with a 50 day MA and a 200 day MA on it, and you should be able to see what I mean.

Anyway attached is the marked up five year weekly chart with the technical attributes highlighted in green and red at the bottom to help make sense of it. So, I'd now suggest that it has just moved into Stage 1A, after a failed/short Stage 4A breakdown that wasn't ready yet due to a number of factors like major near term support. So it's improving, but it's in no mans land at the moment, and could go either way still.

It's a good example though that the Stages aren't always clean, and sometimes are brief and don't have time to fully develop, and that you need to look across multiple time frames, and consider the various technical attributes like the 30 week MA angle, volume, support and resistance levels etc.