Just looking at this one (PRV) where it is forming the tail end (potentially) of a stage 1 base. However, if on the weekly chart you zoom out to around early 2011, you will see that this could also represent a stage 3 (from mid 2013 until now) as it has also formed a previous stage 1 base around late 2011. If you look at the monthly chart, the 30 ma is still rising. I believe we may have touched on this before, or something similar.
Is there any documented examples, on this site, or by Stan or anyone else (covering staged analysis) that covers the numerous full stage cycles that companies can go through during an equities bull (or bear) market. As looking at PRV here we can see from your example that it is again in a stage 1 but this time almost 200% higher that its last stage 1 base/breakout area.
RE: UK Stocks - Watchlist and Discussion (Premium)
(2015-04-04, 12:20 AM)Tryst Wrote: Just looking at this one (PRV) where it is forming the tail end (potentially) of a stage 1 base. However, if on the weekly chart you zoom out to around early 2011, you will see that this could also represent a stage 3 (from mid 2013 until now) as it has also formed a previous stage 1 base around late 2011. If you look at the monthly chart, the 30 ma is still rising. I believe we may have touched on this before, or something similar.
Is there any documented examples, on this site, or by Stan or anyone else (covering staged analysis) that covers the numerous full stage cycles that companies can go through during an equities bull (or bear) market. As looking at PRV here we can see from your example that it is again in a stage 1 but this time almost 200% higher that its last stage 1 base/breakout area.
I've marked up how I interpret the recent PRV.L stages on the weekly chart, as I see it as being very early in what I'd describe as a fledgling Stage 1 with improving technicals, after a failed Stage 4A breakdown that only lasted two weeks back in November. So I only have it as being back in Stage 1 for 3 months so far, but it's still trading very close to it's 30 week MA and the 30 month MA is also quite close so it could still avert the Stage 1 and make another attempt at moving into Stage 4. But for the time being it's developed a small Stage 1 base.
I can't think of any particular examples of the full cycles that I can point you too that's Stan's done, but as you know in the book Stan defines Long Term as only 4 to 12 months (page 18), as most stocks can go through the entire four stages ever few years or so, and so Stan is only looking for Stage 2 advances to be in that range. But that doesn't mean that they will end up where they started when they go through the entire four Stages, as for example during a bull market the Stage 4 breakdowns will be short and sharp and be contained within a much longer term trend, as a stock can be in a monthly Stage 2 for many years, but have multiple full cycles of all the weekly Stages within it as you can see with PRV.L since the 2009 major lows, as it's done the full cycle twice with Stage 4 breakdowns in 2011 and 2014, but has remained in a monthly uptrend the entire time.
This is why I made the addition to the breakout quality checklist a while ago of the monthly chart needing to be above it's 30 month MA when the weekly price is attempting to move into Stage 2A. So when looking at Stage 4A breakdowns you do the reverse and look for stocks that are closing below their 30 month MA and so at least in a monthly Stage 3A. As weekly Stage 4A breakdowns that are well above a strongly rising 30 month MA are much more prone to failure and then reverse higher to become continuations of the major monthly trend. So imo I'd recommended a triple time frame method when assessing the quality of a breakout or breakdown, as for example on a Stage 2A breakout, you want to see the daily chart making a continuation to new highs of at least 6 months imo, the weekly at the Stage 2A breakout point, and the monthly at least closing back above it's 30 month MA. And the reverse for a Stage 4A breakdown.
isatrader
Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.
RE: UK Stocks - Watchlist and Discussion (Premium)
(2015-04-04, 09:10 AM)isatrader Wrote:
(2015-04-04, 12:20 AM)Tryst Wrote: Just looking at this one (PRV) where it is forming the tail end (potentially) of a stage 1 base. However, if on the weekly chart you zoom out to around early 2011, you will see that this could also represent a stage 3 (from mid 2013 until now) as it has also formed a previous stage 1 base around late 2011. If you look at the monthly chart, the 30 ma is still rising. I believe we may have touched on this before, or something similar.
Is there any documented examples, on this site, or by Stan or anyone else (covering staged analysis) that covers the numerous full stage cycles that companies can go through during an equities bull (or bear) market. As looking at PRV here we can see from your example that it is again in a stage 1 but this time almost 200% higher that its last stage 1 base/breakout area.
I've marked up how I interpret the recent PRV.L stages on the weekly chart, as I see it as being very early in what I'd describe as a fledgling Stage 1 with improving technicals, after a failed Stage 4A breakdown that only lasted two weeks back in November. So I only have it as being back in Stage 1 for 3 months so far, but it's still trading very close to it's 30 week MA and the 30 month MA is also quite close so it could still avert the Stage 1 and make another attempt at moving into Stage 4. But for the time being it's developed a small Stage 1 base.
I can't think of any particular examples of the full cycles that I can point you too that's Stan's done, but as you know in the book Stan defines Long Term as only 4 to 12 months (page 18), as most stocks can go through the entire four stages ever few years or so, and so Stan is only looking for Stage 2 advances to be in that range. But that doesn't mean that they will end up where they started when they go through the entire four Stages, as for example during a bull market the Stage 4 breakdowns will be short and sharp and be contained within a much longer term trend, as a stock can be in a monthly Stage 2 for many years, but have multiple full cycles of all the weekly Stages within it as you can see with PRV.L since the 2009 major lows, as it's done the full cycle twice with Stage 4 breakdowns in 2011 and 2014, but has remained in a monthly uptrend the entire time.
This is why I made the addition to the breakout quality checklist a while ago of the monthly chart needing to be above it's 30 month MA when the weekly price is attempting to move into Stage 2A. So when looking at Stage 4A breakdowns you do the reverse and look for stocks that are closing below their 30 month MA and so at least in a monthly Stage 3A. As weekly Stage 4A breakdowns that are well above a strongly rising 30 month MA are much more prone to failure and then reverse higher to become continuations of the major monthly trend. So imo I'd recommended a triple time frame method when assessing the quality of a breakout or breakdown, as for example on a Stage 2A breakout, you want to see the daily chart making a continuation to new highs of at least 6 months imo, the weekly at the Stage 2A breakout point, and the monthly at least closing back above it's 30 month MA. And the reverse for a Stage 4A breakdown.
Great response, Isatrader. I will be bookmarking that comment for referral to later on.
Some follow up questions: when bringing the monthly chart into this, does this then only apply to the stocks in the main indexes (say up to the FTSE350) as some of the volatile sectors, like the precious metals, oilers even, you could miss the stage 2A breakouts as the monthly 30MA is still way above the breakout price?
I guess what I state above can also be applied to sharp downward bear markets like that of 2008/2009. If you look at the monthly PRV chart you posted when the breakout of a stage 1 occurred back towards the end of 2010 the monthly 30MA was downward sloping, but the price broke out to move above the monthly 30MA. So is the direction of the Monthly 30MA less important, just that the price needs to be above it when the stock is attempting a stage 2A breakout? (and the reverse for a 4A breakdown)
RE: UK Stocks - Watchlist and Discussion (Premium)
(2015-04-06, 11:22 AM)Tryst Wrote: Some follow up questions: when bringing the monthly chart into this, does this then only apply to the stocks in the main indexes (say up to the FTSE350) as some of the volatile sectors, like the precious metals, oilers even, you could miss the stage 2A breakouts as the monthly 30MA is still way above the breakout price?
I would apply it to all stocks no matter the volatility as it goes to the quality of the breakout. i.e. if the weekly Stage 2A breakout occurs well below the 30 month MA then it's it means it has much more resistance to work through, and hence is missing one of the key requirements of the method, so you'd probably want to avoid it as an investor due to the opportunity costs, but it could still be a possibility for a shorter term trader.
(2015-04-06, 11:22 AM)Tryst Wrote: I guess what I state above can also be applied to sharp downward bear markets like that of 2008/2009. If you look at the monthly PRV chart you posted when the breakout of a stage 1 occurred back towards the end of 2010 the monthly 30MA was downward sloping, but the price broke out to move above the monthly 30MA. So is the direction of the Monthly 30MA less important, just that the price needs to be above it when the stock is attempting a stage 2A breakout? (and the reverse for a 4A breakdown)
The slope of the monthly MA doesn't matter as it's a very long term MA, but will most likely be sloping downwards when the weekly is trying to breakout into Stage 2A, as price is usually only just recovering above the 30 month MA for the first time in many years.
isatrader
Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.
RE: UK Stocks - Watchlist and Discussion (Premium)
(2015-04-06, 11:41 AM)isatrader Wrote: The slope of the monthly MA doesn't matter as it's a very long term MA, but will most likely be sloping downwards when the weekly is trying to breakout into Stage 2A, as price is usually only just recovering above the 30 month MA for the first time in many years.
I'm sure not by coincidence a lot of the short term stage 4s we've been seeing have all looked like retracements to the monthly 30MA.
Certainly something to bear in mind when looking to go long or indeed short. A short that looks promising is probably lining itself up for a bounce on the 30MA..see if I can code that as an indicator and have that on my chart displayed also
