[Texasmgax]

The only part Im still a little glitched on is identifying the start of stages 1 & 3. For the most part I get it, but I'm wondering if theres a clear cut identifier for both of them. 

Ive outlined the 2 from your pics where I might have called them the beginning of the stages. 

Thank you

The areas that you have highlighted are the climatic action that shows a change of behaviour, which using the Wyckoff's method of Phase Analysis of base structures - marks the start of Phase A. However, in terms of Stage Analysis that doesn't necessarily mean that the stock has transitioned to Stage 3 or Stage 1 at that point. As it's only the initial part of the base. So the Stage would instead be marked with either a sub stage of Stage 2B, which means late in Stage 2, or Stage 2B-, which with the addition of the minus symbol indicates that it's late in the Stage and a technically weak pattern. Or Stage 4B, or 4B- if in a downtrend. As the initial price volatility might still resolve in the direction of the previous trend. So the transition to early Stage 3 or early Stage 1 isn't confirmed until the price action starts to move through the 30 week MA.

There are cases where a stock has gone parabolic and hence be too extended from the 30 week MA. But in the majority of cases you'll find that the stock will trade in a sideways range above and below the 30 week MA for many months, and the 10 week MA will also move through the 30 week MA in both directions a few times in most cases.

So yes you are correct in that the basing process begins at the point that you highlighted, and it may become the first part of the Stage 3 or Stage 1 base structure over time. But, initially at that point it's just a change of behaviour and hence a potential base, which the bias should start with the direction of the current trend, until you see further price and volume characteristics that contradicts the trend start to appear within the base structure.

Hence don't be too quick to suggest the Stage has changed. The change of behaviour is stopping action and the start of a potential base that needs more time and further information to confirm.

This is where the Wyckoff Phase Analysis of base structures can help a lot. So I recommend learning both methods.

Awesome! Thank you so much for the detailed explanation. I appreciate you.