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GOODSTEWARD
Stage 1 Versus Stage 3 Identification
posted May 09 '12 by goodsteward
I sometimes see a large drop in price below the 30 week moving average followed by a rise in price and then oscillation above and below a rising and falling moving average.
The problem is I have difficulty understanding if this is short term first stage basing or actually still in the third stage. An example would be Boeing (BA) viewed today on a 1 year weekly frequency chart.
Does anyone have advice on distinguishing between the stages? Can the stage determination change with the chart timeframe?

BEASTOFBODMIN
Stage 1 Versus Stage 3 Identification
posted May 09 '12 by beastofbodmin
In this chart, MA(30) and MA(40) are 30 and 40 week moving averages, so they are approximately the 150 and 200 day moving averages.

stockcharts.com/h-sc/ui?s=BA&p=W&yr=1&mn=0&dy=0&id=p36051820270
I would say BA has been in a stage 2 since Dec 2011 because the 30 week average has been rising since then. The stage 4 decline was short and there was almost no stage 1. I see brief a flattening of the MA150 on the daily chart, which would be the stage 1.
It's not a textbook chart by any means.

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