[isatrader]

Isatrader, a question about AXS.L. Maybe this is not the best example but it is a reasonable one:

It appears to me that the shape of the chart if we ignore the MA30 indicates it would be in a stage 3. Therefore any upward movement about the recent range is a stage 2 breakout and any drop below it a stage 4 breakdown. However, the recent wiggling is above the MA30 - so it is clearly in stage 2. Therefore rather than being in stage 3 awaiting a continuation is it not more likely in a stage 2B? I thought for a continuation we had to go stage 2 -> stage 3 -> stage 2. We have not had a clear stage 3 yet.

Just trying to get a feel for what to do with stocks that seem to climb rapidly and then reach a trading range well above MA30.

To be a continuation it doesn't have to move into Stage 3. The vast majority of Stage 2 continuations are more minor, and are from consolidations of only one to three months that form above a strongly rising 30 week MA within Stage 2. See the initial post in this thread which has the chart from page 62 of the book that shows the ideal entry point for the trader method. That pattern is the example of an ideal Stage 2 continuation pattern.

With regards to AXS.L and whether it should be considered Stage 2B. The B simply means late in Stage 2, and so as it only moved into Stage 2 in December, and hasn't made it's first continuation move yet, I wouldn't consider it late in Stage 2 personally as I tend not give a Stage 2B rating until it's had two continuation moves.