[jgalt]

Hi guys, newbie here. But I've been lurking for the past few weeks. Just finished SW's book and it opened my eyes to technical analysis. I am looking to trade on the side- not involved professionally in the finance industry in anyway. I just have a few questions that I couldn't find on google:

1. Certain stocks seem to be in perpetual stage 2. That is, they started off low and have been climbing for years. There is no clear cut stage 3, stage 4, or 1 at all. A good example would be NYSE:IBM which has been plodding along for the last year with the price oscillating around the 30 week MA. This current phase was preceded by years of continuous advance. How would one treat those stocks? Would you just consider it to be in a stage 3 top phase and ignore it completely?

Another example would be Microsoft (MSFT) which if you look at it from the beginning looks to be in a stage 3 top for the last 15 years. But when you zoom in, you begin to see the price fluctuating around the MA with some mini break outs and break downs. How does one approach these stocks? Can stage analysis by even applied in such a case?

2. My second question is this- sometimes a stock goes seemingly into a stage 4 spiral, trading well below the MA. Then when it hits a new low, without a build up stage 1 at all, the MA just does an about face and reverses back up as does the stock. How would you treat the stock in these situations? Would this be considered a stage 2 break out?

3. And finally, can a stock have higher and higher stage 1s without coming down? For instance, break out to a new high , level off like a stage 3 then soar to another platform?

And that's it for now! THank you very much for reading this. This is a great site and I hope to contribute in the future.