Canadian Stocks: Current Trends and Chart Analysis

[BoomTime]

Useful Article #4: Stages in Stocks

http://www.sierrainvestor.com/stan_weinstein.html

Stage 1 (The Basing Area) : Stage 1 is a time period where the stock fluctuates in a relatively narrow range. Little or nothing seems to be happening and the stock price will wander back and forth across the 200 day moving average. This period is generally called "base building".

Stage 2 (Advancing Phase) : Stage 2 is an advancing stage characterized by the stock rising above the 200 and 50 day moving averages. The stock may drop below the 50 day average and still be considered in Stage 2. Fundamentally, Stage 2 is triggered by a perception of improved conditions with the company.

Stage 3 (The Top Area) : Stage 3 is the "topping out" of the stock price action. Typically the price will begin to cross the 200 day moving average towards the downside, and the average may begin to round over on the chart. This is the time to take profits.

Stage 4 (The Declining Phase) : Finally, the Stage 4 decline begins. The stock price drops below the 50 and 200 day moving averages, and continues down until a new Stage 1 begins.