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  European Stocks - Watchlist and Discussion
Posted by: isatrader - 05-31-2016, 10:33 PM - Forum: Stage Analysis - Replies (52)

This thread is by request, so that our European members can share their Weinstein trader and investor method charts and discuss them in a relevant place on the forum.

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  Stage Analysis Breakout Quality Checklist
Posted by: isatrader - 08-15-2014, 01:19 PM - Forum: Stage Analysis - Replies (1)

I thought it was about time that I came up with a Stage Analysis checklist for the methods requirements to look for when buying stocks. So the following is a checklist to work through to determine the quality of the breakout and whether it meets the methods requirements. The starting point for Weinstein's method when looking to buy a stock is first to consider Stan's "Forest to the Trees" Approach:

Quote:Forest to the Trees Approach

"i. What's the trend of the market? If it's negative, you'll want to do very little if any buying, even if you see some stocks breaking out. Your probabilities of success are quite low when the market trend is going against you.

ii. Which few groups look the very best technically? The importance of this question can't be overemphasised since my studies have consistently shown that two equally bullish charts will perform far differently if one is from a bullish sector while the other breakout is in a bearish group. The favorable chart in the bullish group will often quickly advance 50 to 75 percent while the equally bullish chart in the bearish group may struggle to a 5 to 10 percent gain.

iii. Once you determine that the market trend is bullish and Group A acts the very best technically, the final step in the process is to zero in on the one or two best individual chart patterns in that sector."

Quote from page 75 of the book

Investor Method

If you are following the investor method, do the majority of your buying early in Stage 2. Ideally the Stage 2A breakout point and it's secondary pullback entry point, or the initial Stage 2 continuation breakout once you've accessed the quality of the Stage 2A phase.

Stage 2A Breakout quality checklist:

Weekly Chart

1. Price Action
a) is price above a flattening or rising 30 week moving average?
b) is the 10 week MA rising?
c) is price moving above the last significant swing high that formed above the 30 week MA?
d) was there a contraction in volatility prior to the breakout. i.e this could be seen through patterns such as the inverse head and shoulders or a cup and handle formation etc?

2. Volume
a) is volume at least two times the four week average by the end of the Stage 2A breakout week?
b) did volume contract significantly during the right hand part of the Stage 1 base on the down weeks

3. Relative Performance
a) is the relative performance of the stock versus the S&P 500 above the Zero Line (Relative Performance 52 week MA)?
b) is the relative performance zero line itself flattening or rising?

4. Support / Resistance
a) is there significant near term resistance? If you need help visualising it, then look at the weekly Ichimoku cloud for a visual aid.


Daily Chart

1. Price Action
a) is the 50 day MA above the 150 day MA?
b) is the 50 day MA rising?
c) did the price on the breakout day have a strong close. i.e. a close near the high of the day?

2. Volume
a) is volume at least three times the daily average volume on the breakout day?


Monthly Chart

1. Price Action
a) is price above the 30 month moving average?
b) is price breaking out to new 12 month highs?

2. Volume
a) is volume at least two times the four month average by the end of the month of the weekly Stage 2A breakout? For breakouts earlier in the month you'll need to judge whether this is likely based on the initial breakout volume. And you should always look at the monthly chart at the end of the breakout month to check it's met the requirement.


This is not an exhaustive checklist, but if a stock fulfills all of these criteria listed, then the probabilities of it being an A+ candidate are greatly increased. But that doesn't mean that you should discard stocks that don't meet all of the checklist as plenty are slow out of the gate and then become A+ stocks later in their Stage 2 advance on one of the continuation breakouts. So definitely keep an eye on those stocks too.

As you can see it's important to analyze a stock over multiple time frames beginning with the weekly chart, as it's the most important in Stage Analysis, and then working through the other time frames for the additional confirmation. And once you find a stock with A+ potential on it's own, then I'd suggest revisiting the sector/group analysis that you did initially and comparing the stock to it's peers. As if it's making a Stage 2A breakout, then you want to see similar behavior in the rest of the group, with ideally the stock you are considering being the leader of the group. i.e. first to move into Stage 2, while the rest of the group are close to doing the same, as we want to buy the leader, not the laggards.

Note that this is still a work in progress, so I will continue to make improvements over time. I hope it helps.

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  Stage Analysis Study Guide - Questions and Answers
Posted by: isatrader - 03-04-2014, 03:18 PM - Forum: Stage Analysis - Replies (9)

The purpose of this Study Guide will be to help people learn to identify the Stages and to emphasize the importance of a full analysis taking into account the various technical attributes that we look to for guidance in determining the Stages i.e. price action in relation to the 10 and 30 week moving averages, volume, relative performance versus the market and the sector, support and resistance zones etc.

So before we start with the questions, lets have a look at the standard weekly and daily charts that I show and define all the various parts so that we are all speaking the same language.

       

Now that you understand what everything is on the weekly and daily charts, the next thing is to recap what the ideal entry points are for the two major parts of the method:

Key requirements of the investor method for Stage 2A breakouts

  1. Price Action - price above a flattening or rising 30 week moving average
  2. Relative Performance - strengthening and ideally above the Mansfield Zero Line (Relative Performance 52 week MA)
  3. Volume - ideally two times the average volume or greater on the Stage 2A breakout week. The book specifies two times the four week average, but I prefer a smoother and longer term average, and so use the 52 week average on my charts, as it tends to be a bit stricter than the four week average and is cleaner on the chart.
  4. Support / Resistance - little or no heavy near term resistance.
For Stage 4A breakdowns the reverse of the above conditions should be true, but volume is less important.

   

The above chart is an edited example from Chart 3-1 on page 60 of the book and shows the ideal entry points for the investor method. The entry point marked with an "A" shows the breakout into early Stage 2A, and the entry point marked with an "B" shows the secondary lower risk entry point on the initial pullback within Stage 2A. To learn more about the investor method start by reading Chapter 3 in the book, and the various resources on the Stage Analysis forum.

Key requirements of the trader method for Stage 2 continuation breakouts
  1. Price Action - price above a rising 30 week moving average
  2. Relative Performance - above the Mansfield Zero Line (Relative Performance 52 week MA)
  3. Volume - ideally at least three times the average daily volume on the breakout day and also two times the four week average or greater on the Stage 2 continuation breakout week
  4. Support / Resistance - little or no heavy near term resistance.
For Stage 4 continuation breakdowns the reverse of the above conditions should be true.

   

The above chart is Chart 3-3 from page 62 of the book and shows the ideal entry point for the trader method. The entry point marked with an "A" shows a Stage 2 continuation move. To learn more about the trader method start by reading Chapter 3 in the book, and the various resources on the Stage Analysis forum.

Let's begin the Q&A...

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  UK Stocks - Watchlist and Discussion
Posted by: isatrader - 01-07-2014, 03:33 PM - Forum: Stage Analysis - Replies (1569)

This thread is for traders and investors of UK listed stocks, where they can share ideas, post trades that they are in, and have discussions etc, and I will be posting the UK specific watchlist charts in this thread from now on that I had been posting in the main watchlist threads.

Due to growing number of UK traders and investors on the Stage Analysis forum, I thought it was about time that you had their own separate thread to make it easier to find the charts and information that you are interested in, as the two main watchlist threads are growing quickly, and so this will help keep the site organised.

If you are unsure how to attach an image with your post see the How to attach an image to a post thread.


UK Investor method watchlist charts

   

Please share any charts that you have on your watchlist that are forming a Stage 1 base or moving into early Stage 2A, and also any charts of note that meet the investor method criteria below:

  1. Price Action - price above a flattening or rising 30 week moving average
  2. Relative Performance - strengthening and above the Mansfield Zero Line (Relative Performance 52 week MA)
  3. Volume - ideally two times the four week average or greater on the Stage 2A breakout week
  4. Support / Resistance - little or no heavy near term resistance.
For Stage 4A breakdowns the reverse of the above conditions should be true.

Not all charts will meet all of the criteria above, so don't be afraid to post any charts that only have some of the attributes, but don't have others, as they may develop in time. So please get involved.

The above chart is an edited example from Chart 3-1 on page 60 of the book and shows the ideal entry points for the investor method. The entry point marked with an "A" shows the breakout into early Stage 2A, and the entry point marked with an "B" shows the secondary lower risk entry point on the initial pullback within Stage 2A. To learn more about the investor method start by reading Chapter 3 in the book, and the various resources on the Stage Analysis forum.


UK Trader method watchlist charts

   

Please share any charts that you have on your watchlist that are already in Stage 2, making or close to making continuation breakouts, and also any charts of note that meet the any of the following trader method criteria below:
  1. Price Action - price above a rising 30 week moving average
  2. Relative Performance - above the Mansfield Zero Line (Relative Performance 52 week MA)
  3. Volume - ideally two times the four week average or greater on the Stage 2 continuation breakout week, or three times the average daily volume on the breakout day
  4. Support / Resistance - little or no heavy near term resistance.
For Stage 4 continuation breakdowns the reverse of the above conditions should be true.

The above chart is Chart 3-3 from page 62 of the book and shows the ideal entry point for the trader method. The entry point marked with an "A" shows a Stage 2 continuation move. To learn more about the trader method start by reading Chapter 3 in the book, and the various resources on the Stage Analysis forum.


Disclaimer: The charts posted in this thread are not recommendations to buy or sell, and are simply meant to highlight stocks that meet some or all of the criteria of Weinstein's method and might be worth doing more of your own research on.

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  Daily P&F Breakouts and Breakdowns in the US Market
Posted by: isatrader - 08-27-2013, 12:26 AM - Forum: Stage Analysis - Replies (839)

This thread will show daily breakouts and breakdowns lists from the entire US market with a market cap of 50million or above, and will include stocks and ETFs.

I will try to go through the daily list when I have time and pick out the best looking charts imo, and will aim to go back through the weeks list at the weekend and pick out the best charts of the week that managed to close the week strongly as well.

I really think that this thread could be one of the most important and useful on the site, as it will cover every Stage 2 advance and Stage 4 decline in the US market with a market cap of 50million or above, and also all of the breakouts and breakdowns within Stages 1 and 3, and so it will be up to us to filter it down to find those elusive A+ candidates that we are looking for.

One other thing that I'd like is for myself and other members to go through the lists each month and pick out the best looking charts of the month, and to highlight any themes we can see developing in certain sectors that have had a lot of breakouts or breakdowns during the month.

Anyway, I hope you enjoy the thread and please get involved.

__________________________________________________________________________________________________

Below is the table of Monday's breakouts and breakdowns in the US market. There was 48 breakouts and 7 breakdowns.

US Market Breakouts - 26/8/13

[Image: attachment.php?aid=2551]

A couple of breakouts that look interesting are: CGOOF, DDD and AXDX. Head and shoulders Stage 1 base pattern on CGOOF, but it still has a declining 30 week MA and average volume. DDD and AXDX are both trader continuation moves with some reasonable volume on the breakouts.

           

US Market Breakdowns - 26/8/13

[Image: attachment.php?aid=2552]



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  What market do you trade the most?
Posted by: isatrader - 08-26-2013, 10:22 PM - Forum: Stage Analysis - Replies (11)

The purpose of this thread is to give me information about what markets that members trade the most to help me to know where to focus on more.

The options are:

  • S&P 500
  • US Mid Caps
  • US Small Caps
  • UK FTSE 350
  • UK AIM
  • Other
  • No preference
If the market you trade the most isn't in the list please reply to the thread as normal and say what it is.

Cheers

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  Economic Charts
Posted by: isatrader - 06-14-2013, 09:50 AM - Forum: Stage Analysis - Replies (14)

During the Q&A with Weinstein last month, Stan confirmed that Stage Analysis can be used on economic data. However, he said that as it is lagging it shouldn't be used as part of our "weight of evidence". So I'm starting this thread for a place to put the charts based on the economic data such as house prices and employment rates etc.

I did a post showing the S&P Case-Shiller Home Price Index, the 20 year US Non-Farm Payrolls chart, and Unemployment rate back in April here: http://stageanalysis.net/forum/showthrea...594#pid594, which showed that the US fundamental data was improving and that housing had moved into early Stage 2A, which has continued to improve since then. So today I want to show the UK Halifax House Price Index charts (non seasonally adjusted), as it's of particular interest to me living in the UK.

Attached are two charts, one long term that shows data back to 1983 and the second chart a closer view of the last eight years, which shows that the UK housing market has also moved into early Stage 2A in the last few months.

To look at the data yourself, here's the link: http://www.lloydsbankinggroup.com/media1...x_page.asp



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  How to create the Mansfield Relative Performance Indicator
Posted by: isatrader - 05-27-2013, 06:16 PM - Forum: Stage Analysis - Replies (34)

One of the core components of Stan Weinstein's method is the use of Relative Performance compared to an index such as the S&P 500, to a sector or to another stock. Which was referred to in his book as Relative Strength.

However, this should not to be confused with the popular RSI (Relative Strength Index developed J. Welles Wilder), which is a momentum oscillator that measures the speed and change of price movements on a single stock. And so, to avoid any confusion when talking about the kind of Relative Strength we are interested in, I've renamed to be "Relative Performance" on the Stage Analysis website.

Weinstein defines it as the following on page 18 of the book:

Quote:"How a given stock (or group) acts in relation to the overall market. For instance, if stock XYZ rallies 10 percent while the market moves ahead 20 percent, that's poor relative strength even though the stock has advanced. On the other hand, if stock XYZ declines 10 percent while the market averages decline 20 percent, that's favorable relative strength even though the stock has moved lower. The formula for measuring relative strength is simply the price of a stock ( or group average) divided by the price of a market average."

Relative Performance Indicators

On the Stage Analysis website I have two ways of representing the Relative Performance on a chart. The first version I show is the representation that people are used to from the book (#1 on the below chart) which is the Mansfield Relative Strength Indicator. The second version that I show immediately below (#2 on the below chart) is the standard relative performance line that you get if you divide the closing price of the stock by the index that you want to reference, which in the majority of cases on the Stage Analysis website will be the S&P 500 Index unless otherwise stated.

So as you can see, these two indicators are identical, however, they show the Relative Performance data in slightly different ways, which I personally find useful to see. For example, the "zero line" on the Mansfield version is a flattened 52 week moving average which shows the data more like an oscillator and so is easier to see when it reaches extremes. However, on the standard relative performance line the slope of the 52 week moving average (zero line) can be seen, which can give further clues to the relative performance of the stock versus the index on a longer term basis.

Below is a weekly chart of Apple (AAPL) showing the two versions of the Relative Performance Indicator versus the S&P 500 Index.

[Image: attachment.php?aid=1362]

Standard Relative Performance indicator

The formula for calculating standard relative performance indicator is quite simple:

Code:
RP = ( stock_close / index_close ) * 100

And then a 52 week moving average is added to the indicator to show the zero line.

So the longer version is:

Standard Relative Performance = (today's close of the stock divided by today's close of the index) * 100


Mansfield Relative Performance indicator

The formula of this indicator is a bit more difficult than the regular Standard Relative Performance indicator:

Code:
MRP = (( RP(today) / sma(RP(today), n)) - 1 ) * 100

Where:
RP = Standard Relative Performance indicator (see above)
SMA = Simple moving average over n days.
n = 52 for weekly charts, and n = 200 on daily charts

So to make it a bit clearer:

Mansfield Relative Performance = (( Today's Standard Relative Performance divided by Today's Standard Relative Performance 52 Week Moving Average )) - 1) * 100

I hope the above calculations all make sense, but if you need further assistance then chartmill.com did a good article on it which you can find here: https://www.chartmill.com/documentation....Mansfield)



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  Stop Loss Positioning Guide
Posted by: isatrader - 03-20-2013, 08:27 PM - Forum: Stage Analysis - Replies (44)

This thread will cover where to place your initial stop loss and how to trail it as the price of the stock moves higher in Stage 2. For the initial examples I've used a Global Trend Alert Newsletter that I received from Stan Weinstein as a free sample last March. So the examples are the actual positioning as suggested by Stan himself in the March 2012 GTA, and hence we can study these old recommendations to learn the correct positioning for ourselves. So remember these are over a year old and were made when Weinstein viewed the longer and intermediate term outlooks as still bullish at the time, but the short term as only moderately positive, but "beyond extended" with more near term warnings than they could keep track of and with signs of “churning” on the tape, as stocks had broken out and gone nowhere in a hurry. So he was emphasising the "Forest to the Trees" approach - which can be found on page 75 of the book and suggests stock picking the best few chart patterns from the strongest sectors only when the overall trend is positive as it was back then. So hopefully that gives you some context to these charts as the majority likely failed to get very far in the short term, as it was around five weeks before the intermediate term top in the S&P 500 and hence there was likely a lot of failed breakouts in these, at least in the short term. Which I think highlights the importance of the overall trend and the type of buying you do at particular points in it. But that is a subject to discuss in another thread as this thread is to learn correct stop loss positioning and so doesn't matter whether these were successful or not, just that the stop loss would have protected the position from further downside if it failed in it's breakout.

I plan to mark all of the charts up on the daily and weekly charts that I use from stockcharts.com that show the key moving averages, relative performance versus the S&P 500 and the volume. But to begin with below are the Investor and Trader ideal charts recreated and updated from the charts in the book on pages 185 and 195 which around where you will find the stop loss section in the book.

Trailing Stop Loss Guide for Investors (Average 12 months)

I will write out the full description for these diagrams when I have more time. Refer to the Chapter 6 in the book for a full description of how to trail your stop loss. Below is the recreated diagrams...

[Image: attachment.php?aid=520]

Trailing Stop Loss Guide for Traders (Average 2 to 4 months)

[Image: attachment.php?aid=521]



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  How to create the Cumulative Force Index indicator
Posted by: isatrader - 03-20-2013, 03:37 PM - Forum: Stage Analysis - Replies (4)

I get asked a lot about the volume indicator that I use at the bottom of my charts. It is a custom volume indicator adapted from Elder's Force Index, and I use it so that I can have a clearer read of the volume data.

For those that are using the free ProRealtime online chart software, I've created the code for it and attached below. Also attached are the screenshots of the settings files and the ProRealtime .itf file if you want to import it in directly:

Code:
ForceIndex1 = (Close-DClose(1))*Volume

ForceIndex2 = ExponentialAverage[10](ForceIndex1)

CumulativeForceIndex = cumsum(ForceIndex2)

RETURN CumulativeForceIndex

This code creates the cumulative force index, and then you need to add a 10 simple MA to it, and finally Add a new colour zone to fill it. Attached are the screenshots of the settings and the result on the weekly chart at the bottom.


.txt   PRT_CumulativeForceIndexCode.itf.txt (Size: 162 bytes / Downloads: 435)



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