[isatrader]

Hello all,
I was hoping some experienced traders could comment on IBG.TO (IBGI Group on TSX) as it seems to me it is breaking out stage 2 (above resistance and over 30 ema on weekly with good weekly volume). I have attached a chart. 

Thank you,
Brian

The main negative that I can see is the very large amount of resistance overhead still. See Chapter 4 (page 96) for an explanation of why this could be a problem. As the Stage 1 base is quite small compared to the Stage 4 decline that it had in 2018. I'm not saying it can't do well or that you shouldn't buy it, as you should make your own decisions on trades that you place always, just that the method recommends focusing on the higher quality setups that meet all of the requirements from the book, due to the opportunity costs.

My recommendation would be to get rid of the MACD, RSI and weekly pivot point indicators from your chart, and add the weekly ichimoku cloud instead, as it will help you learn to identify where the long term and time based resistance is and clean up the price action so you can see it more clearly.

My personal preference is to never buy a stock that is still below the weekly ichimoku cloud (resistance), as it's often too early and means you may end up holding a stock for much longer while it chops around in a larger Stage 1 base or very early Stage 2. It doesn't mean that it won't be a successful investment necessarily, but due to the time required when there's large resistance, the risk of failure is higher, and often your money could have been better allocated elsewhere during the same time period (opportunity cost).

See the Stage Analysis Study Guide - Questions and Answers thread for detailed examples.