[Tryst]

Definitions of the Stages and Sub-stages

Stage 1A Start of a base. Needs much more time.
Stage 1 Basing Phase. May begin accumulation.
Stage 1B Late in base-building phase. Watch for breakout.

Stage 2A Early in uptrend stage. Ideal time to buy aggressively.
Stage 2 Advancing Stage.
Stage 2B Getting late in uptrend.

Stage 3A Looks as if a top is starting to form. Be sure to protect holdings with a close stop.
Stage 3 The Top Area. Start to reduce positions.
Stage 3B Has become increasingly toppy. Use rallies for at least partial selling.

Stage 4A Stock has entered Downtrend Stage. Close out remaining positions.
Stage 4 The Declining Stage. Avoid on the long side.
Stage 4B Late in downtrend. Much too soon to consider buying.
Stage 4B- Although not yet “officially” in Stage 1A, stock has now seen its low for the cycle.

Additional ratings
(A) Early in that Stage.
(B) Late in that Stage.
(+) Outstanding pattern in that Stage.
(–) Unexciting pattern in that Stage.

Hi Isatrader, I have a question on stage 2B / stage 3A, which relates to continuation moves/patterns in the middle of a stage 2 move. Are continuation patterns classed as stage 2B, potentially forming into a stage 3A until a breakout of the continuation is made to the upside, from which it then becomes a stage 2A again and stage 3A is taken off the table. Is that how this area of the stage analysis evolves and is classified?

If we take the chart below, of TW. (Taylor Wimpey) it was forming a stage 2B, it was starting to build a continuation pattern or reversal pattern, since it was looking like a ascending triangle (a continuation pattern), but also it could have been a double->triple top (a reversal pattern), in which case the formation of the pattern would have been the whole stage 3 and a confirmation of a triple top would have lead to a Stage 4A.

   

Hope I have made myself clear, if not, let me know.