[isatrader]

Silicon Graphics (SGI)

This one popped up in my screener this weekend...

English is not my native language (Belgium) but i think the chart speaks for itself.

SGI chart

BTW, very impressive work Isa on this Stage Analysis thing!

Hi Chartmill,

Thank you and welcome to the site.

SGI is what we'd call an early Stage 2A breakout attempt, from a small base, that is still under considerable resistance. The relative volume was strong at more than 4x the weekly average and relative performance is breaking above a still declining zero line. But the small base and position under the resistance would make it unattractive in terms of the Stage Analysis method, as resistance is a major consideration of the method.

It is also going against the major market trend which is in a Stage 4 decline currently, and so would only be considered by the method if it had an exceptional A+ type pattern as explained in the book. As going long during a Stage 4 decline is one of Stan's "Don't Commandments" from the book. So the focus currently for US stocks is on the short side.

I'm not saying that it won't do well. But just that in terms of the methods rules, it only meets a few criteria, and breaks a number rules as mentioned above, and so wouldn't be considered by someone following the methods rules strictly.

I marked up the charts below so that you can compare to other examples on here.