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Stage Analysis & Trailing StopsWhy Stage Analysis Stage Analysis is the very first thing you need to get right or everything else will be unnecessary, according to Mark Minervini. Based on his study 98% of all big winners, dating back from 1800s to current day have been in confirmed Stage 2 BEFORE they made their big move! This makes Stage Analysis a foundational knowledge for anyone who trades the market. History of Stage Analysis Stan Weinstein outlined the principles of Stage Analysis in his 1988 book, Stan Weinstein's Secrets for Profiting in Bull and Bear Markets. This classic text opened the door for many non-professionals to execute successful trading system based on his detailed description of the best prospects for long buys and short sale positions. However, his classic concepts have a far wider reach — it is a premise that gives the best time for a trader to enter and trade the market. It divides market action by 4 segment (Stages) which analyzes prices dynamics over a continuous cycle that includes bottoms, breakouts, top peaks breakdowns and downtrend occurrences.
NASDAQ:TSLAEducation
by TintinTrading
<<Weinstein Stage Analysis>>Hey folks! Welcome to my post on Weinstein Stage Analysis on TSM. Background: Stage Analysis is a topic Stan Weinstein discussed in his book from 1988 “Secrets for Profiting in Bull and Bear Markets“, where he details his classic four stage breakout method for identifying the best quality stocks to buy and sell in any market environment. Stage 1- The basing: Stage 1 occurs when a stock bottoms and forms a horizontal consolidation. New shareholders replace the old ones, in turn replacing fear with hope that will eventually turn into greed. Accumulation tends to speed up near the end of the pattern, triggering a set of higher-than-average volume spikes that show enthusiastic buying interest. On-balance volume (OBV) and other accumulation-distribution tools bottom out with price and turn higher, reflecting the newly bullish technical outlook. Watch closely when these indicators show greater upside than price action within the base, because this can signal an impending breakout that sets off Stage 2. Stage 2 - The Advance: Stage 2 occurs when the price has broken out of the consolidation in stage 1. It triggers a bullish uptrend where the price stays above the 30 Week MA. You will also notice that the stock will outperform the S&P 500 during this stage. Stage 3 - Consolidation: When the price of the stock crosses below the 30 Week MA, it is safe to assume that stage 3 is happening where the price is in a long consolidation. The price of the stock fails to reach higher highs and the stock tend to underperform the S&P 500. Stage 4 - Decline: Stage 4 typically occurs when the price of the stock breaks below a long term support during the stage 3 consolidation. It usually starts with high volume and ends in low volume. Short positions taken early in a downtrend carry higher risk and higher reward than late in the decline. Conclusion: Stan Weinstein's stage analysis is a very powerful tool for longer term trading (mainly on the weekly chart) and risk management. Another great example using the Weinstein stage analysis is PYPL where you can clearly see the stock following the stage analysis patterns.
NYSE:TSMEducation
by kenhuangsy2
1
Divergence between VStop and Stan Weinstein’s 30MA* I call Stan Weinstein’s 30MA my most definitive MA line because this is the level where breakouts take place as Stage 1 transients to Stage 2. * As long as price point remains above the 30MA, the counter will stay in an uptrend and according to Stan Weinstein, we should continue to hold position provided it is is an uptrend. However, if the price point dips below the 30MA, it’s time to exit especially if you’re still holding any position. * Based on my observations, VStop (Volatility Stop), on the other hand, seems to adhere to the 30MA: lower limits denoted by green+ surface whenever the price point stays above the 30MA while upper limits denoted by yellow+ surface when the price point dips below the 30MA. So it appears that VStop follows Stan Weinstein’s 30MA line. * Well not so. Through my analysis/observations, divergence between the VStop and the 30MA does appear some times and I find them to be significant for Entry Signals. Taking DOMO as an example, yellow+ began surfacing on 6 Jan which is a divergence from the 30MA. Technically, VStop should be surfacing the green+ as price point is above the 30MA. The VStop green+ only converges on 14 Jan and this is a good Entry Signal to go long. So far, I have verified this finding with other indicators like RSP and MACD amongst others and it appears that my prognosis is correct which is why I’m sharing this with you. * Word of caution: this is my first sharing as a rookie trader. I always do due diligence whenever someone mentions a noteworthy counter. Just so you know, I’m long on DOMO like yesterday (14 Jan) at $68 which I reckon is a good price point for entry. Although my stop loss is at 30MA, baring any unforeseen situations which may result in earlier exit, I plan to ride this trend as do all trend followers.
NASDAQ:DOMOLong
by Jamxliu
2
Howden Joinery HWDN on watchlistUsing Weinstein stage analysis on the weekly chart we see that HWDN is potentially entering Stage 2 having broken out of a minor Stage 1 resistance and retested the 30MA. Watching for a break above the upper golden trendline drawn from the previous Stage 3 highs. The upper and lower golden trendlines indicate a bullish triangle pattern and is very close to an ascending triangle (horizonal top). I will take a half position on a break above 530. My preference would be for further consolidation within the triangle pattern with a contracted trading range leading to a more powerful breakout in the future.
LSE:HWDN
by oOTradingOo
Contrarian investing vs catching a falling knifeI am not the author of the seekingalpha article even the though the title looks similar. I just find it cool and it rings. For followers of Stan Weinstein chart analysis (do google this up, his technical analysis methods are really easy to use), you would have noticed that KORS has just exited stage 1 and is now at the possible start of stage 2. The high volume confirms this. Also, the crossover of the 30 SMA confirms this as well. Fundamentally speaking, KORS has a low PS ratio of 2.05 (at time of writing) and based on Ken FIsher investment strategy, the PS ratio below 3 is fairly attractive. It also has low debts, which is a good thing as the Fed starts to increase interest rates. DCF puts KORS at a valuation of $71. Interestingly this coincides with the 50% Fib retracement of this chart. I have bought 25 shares (I am a poor college student) at $50.06 and will prepare to sell at 50% Fib retracement.
KLong
by soldierducky
1