
for investors seeking capital growth
Technical Stage Analysis
Refined to identify ‘buy/sell’ points for trading stocks
The simple diagram below illustrates the clear and uncomplicated approach to trend analysis used by ShareHunter.
By itself it is useful but it becomes a powerful trading tool when used in conjunction with the relative action table. By combining the two we achieve an immediate and accurate view of the overall dominant trend of the market and a guide for deciding when and what new share trades should be made, both medium to long-term (the ‘Investor’ option) and short-term (the ‘Trader’ option).
Stage Identification Diagram -
Stage 1 - Accumulation/Basing Trend
Stage 2 - Advancing/Uptrend
Stage 3 - Topping/Distribution Trend
Stage 4 - Declining/Downtrend
How to trade the Stages once they have been identified for each index and stock: The Relative Action Table –
| Stage 1A | = | Start of a base; needs more time |
| Stage 1 | = | Basing phase; may begin accumulation |
| Stage 1B | = | Late in basing phase; watch for breakout |
| Stage 2A | = | Early in Uptrend; ideal time to buy aggressively |
| Stage 2 | = | Advancing stage; may increase holding |
| Stage 2B | = | Getting late in uptrend; watch carefully, but still a hold |
| Stage 3A | = | Looks as if a top may be starting to form; protect holding with a close stop |
| Stage 3 | = | The top area; start to reduce position size |
| Stage 3B | = | Becoming increasingly ‘toppy’; might use rallies for partial selling/selective shorting |
| Stage 4A | = | Has entered Downtrend; close out remaining Long positions; time to start Shorting |
| Stage 4 | = | Declining stage; avoid the Long side, take Short positions |
| Stage 4B | = | Late in downtrend; close up short stops; much too soon to consider buying. |
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