# Stan Weinstein's Stage Analysis: Identify Trends and Profitable Entry/Exit Point

https://www.youtube.com/watch?v=4BHxUKOTCqI

[00:00] All right, welcome back everybody to another DUT tutorial.
[00:03] This is going to be a really good one.
[00:05] It's covering a really important concept which was actually one of the first things that I learned when I started trading and took Dr. W's class back in uh early of 2019.
[00:14] And I think it's something foundational that every single person should master as they go through, you know, learning to trade.
[00:21] Whatever their style is, whether they're intraday, whether they're a long-term position trader investor.
[00:27] The concept that we'll be talking about today, which is stage analysis, is fractal.
[00:30] Meaning it occurs on all time frames because it's a function of supply and demand and how markets move.
[00:43] So in this tutorial, we'll be talking about stage analysis, going through a bunch of examples and discussing the stage analysis indicator that we have here in the DV platform.
[00:51] That makes it that much easier to identify the stages and know when to buy, when to sell, when to look for opportunities, uh, when to, you know, avoid.
[01:02] Opportunities, uh, when to, you know, avoid a stock, uh, it's very clear-cut, nice and visual as well as you can see right here.
[01:08] And uh, just makes it that much easier to trade using stage analysis.
[01:10] So first things first, stage analysis was developed by Stan Weinstein.
[01:14] Uh, someone who I've had the pleasure, the pleasure of talking with, uh, substantially, as we did a master class together.
[01:20] And it basically looks for those longer-term cycles, usually on a weekly chart, uh, that describe kind of of whether, uh, long-term institutions are accumulating or distributing stock.
[01:34] Um, early in a stock's life cycle, they'll be a stage one where the stock pretty much oscillates from left to right, um, just kind of forming out a longer-term base.
[01:42] Maybe there's an inverse head and shoulders in there, uh, then from there we see a breakout through a line of resistance, ideally on huge volume or at least above average.
[01:54] And that starts a longer-term uptrend where institutions who have been accumulating during stage one and and kind of form this pattern making the stop bottom, uh, stock bottom, uh, continue.
[02:04] Stop, bottom, uh, stock bottom, uh, continue to accumulate other, uh, you know, entities.
[02:07] To accumulate other, uh, you know, entities and individuals and, uh, institutions.
[02:09] And individuals and, uh, institutions continue to accumulate during this trend.
[02:12] Continue to accumulate during this trend and the stock begins to rise above.
[02:14] And the stock begins to rise above rising 10-week moving average, uh, 40-week.
[02:16] Rising 10-week moving average, uh, 40-week moving average and starts an uptrend.
[02:19] Moving average and starts an uptrend, then eventually we start to lose steam.
[02:22] then eventually we start to lose steam momentum, um, and we start undercutting.
[02:24] Momentum, um, and we start undercutting those moving averages and enter more of.
[02:25] Those moving averages and enter more of a stage three and if there is.
[02:28] A stage three and if there is significant enough distribution and.
[02:30] significant enough distribution and overall market is often pretty weak, uh.
[02:32] Overall market is often pretty weak, uh, during during these periods, uh, we'll.
[02:34] During during these periods, uh, we'll undercut the moving averages and kind of.
[02:35] Undercut the moving averages and kind of have the reverse of that longer term.
[02:38] Have the reverse of that longer term uptrend and start a downtrend below the.
[02:41] Uptrend and start a downtrend below the declining 10-week and 40-week moving averages.
[02:45] Declining 10-week and 40-week moving averages, these declines, um, you know, it's a, it's a.
[02:48] These declines, um, you know, it's a, it's a trend, so we just have to kind of wait.
[02:49] Trend, so we just have to kind of wait and see until it ends, but often there's.
[02:52] And see until it ends, but often there's short, more short-term, um, and short-lived.
[02:55] Short, more short-term, um, and short-lived rather than the uptrends, and we want to.
[02:57] Rather than the uptrends, and we want to be involved to the long side during the.
[02:58] Statue uptrends and either avoid the stock or be shorting during these.
[03:01] Stock or be shorting during these downtrends, now the indicator here, I'll.
[03:03] Stock or be shorting during these downtrends, now the indicator here, I'll.
[03:05] Downtrends now, the indicator here, I'll kind of walk through the different colors.
[03:06] You know, early stage two is kind of a pale green.
[03:09] It then gets into a deeper green as the trend progresses and really takes hold.
[03:13] Um, stage three is kind of identified by streaks of white and yellow that show up.
[03:18] And then stage four is that, you know, deeper red color, pink color.
[03:24] Ha, um, and then we, you know, if the market turns around, if the turns around as well.
[03:29] And if another enough institutions are accumulating, we see it transition back from stage four to a stage uh one and then stage two.
[03:36] And kind of restart that overall cycle.
[03:39] Uh, so this is perfect for, um, both longer-term investors and active position traders.
[03:45] But also for swing traders, we want to be involved in stocks that have the wind at our backs with the institutions accumulating shares.
[03:51] And we want to be focused on stocks in strong stage twos, buying the base breakouts, riding the short-term trends within this longer-term trend.
[03:58] So like I said, this is useful whatever your style may be.
[04:02] Uh, maybe
[04:08] Whatever your style may be, maybe you're even an intraday day trader.
[04:10] You just want to be involved as a stock is kind of resuming the uptrend from a well-constructed base within an overall long-term uptrend.
[04:17] That's going to place the odds in your favor and improve the potential of the trade.
[04:21] Where we can get a nice quick move.
[04:25] Maybe if you're an intraday trader, you're exiting that first breakout day.
[04:27] And if you're a swing trader, you're holding for a few weeks.
[04:30] And if you're a position trader, you're trying to hold for that longer term move, either from a base or from the start of a stage two uptrend.
[04:36] So that's pretty much a breakdown of the stages, both using the moving averages and whether we're above or below a rising or declining 10-week or 40-week moving average.
[04:43] And then also using the stage analysis indicator, using the coloration.
[04:51] You know, very simply, green means we're starting to stage issue uptrend, red is a stage four decline, and we want to be avoiding stocks there.
[05:00] And looking for stocks just starting or already, you know, undergoing a strong stage two.
[05:09] Undergoing a strong stage two uptrend, so um I highly recommend uh that.
[05:13] Uptrend, so um I highly recommend uh that you know we're going to go through a few examples today.
[05:14] You know we're going to go through a few examples today but I highly recommend you go back in time.
[05:15] Examples today but I highly recommend you go back in time, look at the biggest winners from each year.
[05:17] You go back in time, look at the biggest winners from each year and you know what stage they were in when they made their major moves.
[05:19] Winners from each year and you know what stage they were in when they made their major moves and most likely uh they that was within a strong stage two uptrend um.
[05:24] Major moves and most likely uh they that was within a strong stage two uptrend um and even the greatest stocks imately you know falter and fail.
[05:28] Was within a strong stage two uptrend um and even the greatest stocks imately you know falter and fail and those periods are almost always in a strong stage four decline.
[05:30] And even the greatest stocks imately you know falter and fail and those periods are almost always in a strong stage four decline.
[05:33] Know falter and fail and those periods are almost always in a strong stage four decline if we go to pelaton uh which is a great kind of textbook example of the.
[05:36] Are almost always in a strong stage four decline if we go to pelaton uh which is a great kind of textbook example of the the stage analysis um you know cycle.
[05:39] Decline if we go to pelaton uh which is a great kind of textbook example of the the stage analysis um you know cycle we've got the stage2 uptrend while it was good in 2020.
[05:42] A great kind of textbook example of the the stage analysis um you know cycle we've got the stage2 uptrend while it was good in 2020 then we lose momentum.
[05:45] We've got the stage2 uptrend while it was good in 2020 then we lose momentum stage three begins just in February of 2021.
[05:46] Was good in 2020 then we lose momentum stage three begins just in February of 2021 uh we form lower highs.
[05:49] Stage three begins just in February of 2021 uh we form lower highs we undercut the moving averages the moving averages start declining.
[05:52] 2021 uh we form lower highs we undercut the moving averages the moving averages start declining and this all of this is is a stage four decline.
[05:55] The moving averages the moving averages start declining and this all of this is is a stage four decline.
[05:57] Start declining and this all of this is is a stage four decline there's a little bit of rest bit.
[05:59] Is a stage four decline there's a little bit of rest bit we try to form a stage one and move out.
[06:01] Bit of rest bit we try to form a stage one and move out but we kind of resume that stage four.
[06:03] One and move out but we kind of resume that stage four and we just continue to fall.
[06:05] That stage four and we just continue to fall and if we go from where we start.
[06:10] And if we go from where we start and undercut that 10 week and start this stage three, we're dropping 97% from highs.
[06:19] Um, over the course of, you know, the next two years or so.
[06:21] During the statue uptrend when it really got underway on this move right here.
[06:24] if we even take the close that week, we had an increase of 272.
[06:26] So we want to be involved during stage two uptrends and avoid or short during these stage four declines.
[06:31] You never know how destructive they can be.
[06:33] Uh, this cycle often leads fundamentals because institutions do great research.
[06:38] And they're kind of selling their shares up here, distributing stock, uh, even before the rest of us get the information or know-how and research that, you know, Pelaton is losing steam as a company.
[06:52] And they're selling shares up here in the last move up.
[06:54] Um, and during the stage three and stage four leading to this strong decline.
[06:56] Zoom again, a really nice, another textbook example started the stage two way back in here.
[07:04] Way back in February of 2020 and advanced strongly.
[07:12] February of 2020 and Advance strongly until the stage three 477 per stage.
[07:15] Until the stage three 477 per stage three right here started highlighted in yellow.
[07:17] Um and then we started the stage four.
[07:19] It was a little bit sloppy here.
[07:21] This stage three can be more extended and can last quite a while.
[07:23] Um and then the stage four really took hold back back in here.
[07:25] And even from the undercut this low down here.
[07:27] Um we've declined considerably off the highs.
[07:29] Uh we were down about 78%.
[07:33] Uh and now we're just kind of back in a stage four SL stage one where maybe we're forming out a base here.
[07:35] Uh near these lows but we haven't yet started a new stage two uptrend.
[07:37] Which You' be waiting for if you're looking to get involved in Zoom.
[07:39] Uh personally I pair stage analysis with all my other uh lenses that I like to look at a stock.
[07:42] Uh so I'm looking for a leading theme leading group.
[07:44] Um a strong Catalyst news event that's going to propel a company forward.
[07:46] Uh Zoom you know uh it's kind of old news.
[07:48] It's part of a theme that was popular back in 2020 but now I'm kind of looking for what's the leading themes of.
[07:49] Looking for what's the leading themes of.
[07:52] Leading themes of.
[07:55] Leading themes of.
[07:57] Leading themes of.
[07:59] Leading themes of.
[08:02] Leading themes of.
[08:04] Leading themes of.
[08:06] Leading themes of.
[08:08] Leading themes of.
[08:10] Leading themes of.
[08:13] Looking for what are the leading themes of today, you know, semiconductors, AI.
[08:16] You know, semiconductors, AI, you know, those themes are in vogue right now.
[08:18] You know, those themes are in vogue right now.
[08:18] That's what institutions are accumulating versus, you know, something like Zoom.
[08:21] Isn't really of interest, um, even if it did start a steep uptrend.
[08:23] Even if it did start a steep uptrend, the potential isn't quite there relative to a stock that's in a leading theme.
[08:27] The potential isn't quite there relative to a stock that's in a leading theme and group.
[08:29] And Stan Weinstein mentions that many, many times as a key focus of his book.
[08:31] Many, many times as a key focus of his book that he's looking for uh leading stocks in leading groups and sectors.
[08:36] So that's a very important thing to remember.
[08:39] Some more recent strong examples, we've got ELF, uh, which started a steep uptrend way back in June 20 of 2022.
[08:47] This is actually one of the uh first leading stocks out of the bear market.
[08:49] You can see the stage four is actually relatively uh short-lived here with this stock.
[08:53] But if we take this to even this base which was highlighted as a stage three as we broke below that 10-week moving average.
[08:58] That was a good 271, we resumed the stage two uptrend here and, um, let's see, gained another 80% or so.
[09:09] And now we're kind of back forming a base, uh.
[09:14] Now we're kind of back forming a base, so the stage 3s will highlight the base.
[09:16] So the stage 3s will highlight the base.
[09:19] Uh, Stan Weinstein himself prefers to be in a stock when it's holding that 10-week moving average.
[09:20] In a stock when it's holding that 10-week moving average, but for longer-term investors, that 40-week moving average, you can see we found support in this area that can be another really excellent guide.
[09:24] Found support in this area that can be another really excellent guide.
[09:26] So depending on your time frame, if you're a more active position trader, maybe you're exiting at the 10-week or at least selling some.
[09:30] depending on your time frame if you're a more active position Trader maybe you're exiting at the 10 we or at least selling some.
[09:31] If you're a longer-term investor, maybe you're waiting for, um, you know, a few weeks of a stage four decline so you can try to capture that longer-term move.
[09:33] Some if you're a longer term investor maybe you're waiting for um you know a few weeks of a stage for decline so you.
[09:37] Can try to capture that longer term move, hold for, you know, tax purposes if that trend is continuing.
[09:39] Few weeks of a stage for decline so you can try to capture that longer term move hold for you know tax purposes if that trend is continuing um and just looking.
[09:41] And just looking to play that that longer term larger move while more active traders are trying to play, you know, those short-term swings from short-term consolidations on breakouts.
[09:44] Trend is continuing um and just looking to play that that longer term larger move while more active Traders are trying to play you know those shortterm swings from short-term consolidations on breakouts.
[09:46] Um and you know that whatever your style, you can benefit from using your stage analysis framework as your longer-term view of the trend.
[09:49] To play that that longer term larger move while more active Traders are trying to play you know those shortterm swings from short-term consolidations on breakouts um and you know that whatever your style you can benefit from using.
[09:50] Move while more active Traders are trying to play you know those shortterm swings from short-term consolidations on breakouts.
[09:52] Trying to play you know those shortterm swings from short-term consolidations on breakouts.
[09:54] Breakouts um and you know that whatever your style you can benefit from using your stage analysis framework as your longer term view of the trend.
[09:57] Um and you know that whatever your style you can benefit from using your stage analysis framework as your longer term view of the trend.
[10:00] Your style you can benefit from using your stage analysis framework as your longer term view of the trend.
[10:02] Um app is another strong example started stage two way back in here and has been a really awesome stock of 288 since then.
[10:05] Longer term view of the trend um app is another strong example started stage two way back in here and has been a really awesome stock of 288 since then and in.
[10:07] Another strong example started stage two way back in here and has been a really awesome stock of 288 since then and in.
[10:10] Way back in here and has been a really awesome stock of 288 since then and in.
[10:14] Awesome stock of 288 since then and in Defu you can run uh screens using the stage analysis criteria.
[10:17] Defu you can run uh screens using the stage analysis criteria.
[10:19] So not only do we have the indicator here but you can also uh screen for stocks in stage two.
[10:20] We have the indicator here but you can also uh screen for stocks in stage two.
[10:23] Uh screen for stocks in stage four if you'd like to find some shorts.
[10:25] Uh screen for stocks in stage four if you'd like to find some shorts um and this will show up right there on that screen.
[10:27] Will show up right there on that screen you could also add the component that volume on that week has to be above 200%.
[10:29] You could also add the component that volume on that week has to be above 200%.
[10:31] Volume on that week has to be above 200% however you would like to do it but you can see it broke through this line of resistance and started that stage two.
[10:33] However you would like to do it but you can see it broke through this line of resistance and started that stage two.
[10:35] Can see it broke through this line of resistance and started that stage two formed another base here re-broke out.
[10:36] Resistance and started that stage two formed another base here re-broke out this is continuation byy Point um.
[10:38] Formed another base here re-broke out this is continuation byy Point um and you know the ideal byy point for Traders.
[10:40] This is continuation byy Point um and you know the ideal byy point for Traders pan Weinstein's uh methodology uh coin.
[10:43] You know the ideal byy point for Traders pan Weinstein's uh methodology uh coin this is another good example um.
[10:45] This is another good example um you know this is a little bit more erratic um but highlights the importance of you know.
[10:49] You know this is a little bit more erratic um but highlights the importance of you know even if you believe in a thesis I know so many people um believed in coin up in here.
[10:51] This is a little bit more erratic um but highlights the importance of you know even if you believe in a thesis I know so many people um believed in coin up in here.
[10:54] I know so many people um believed in coin up in here I actually traded in this area but then we started stage three started stage four and not until here did we kind of restart a stage one and then break out.
[10:55] Even if you believe in a thesis I know so many people um believed in coin up in here I actually traded in this area but then we started stage three started stage four and not until here did we kind of restart a stage one and then break out.
[10:57] I know so many people um believed in coin up in here I actually traded in this area but then we started stage three started stage four and not until here did we kind of restart a stage one and then break out.
[11:00] I actually traded in this area but then we started stage three started stage four and not until here did we kind of restart a stage one and then break out.
[11:03] Then we started stage three started stage four and not until here did we kind of restart a stage one and then break out.
[11:05] stage four and not until here did we kind of restart a stage one and then break out and even here from these bases this is where the move really got going.
[11:07] And not until here did we kind of restart a stage one and then break out and even here from these bases this is where the move really got going.
[11:10] Kind of restart a stage one and then break out and even here from these bases this is where the move really got going.
[11:13] Break out and even here from these bases this is where the move really got going.
[11:15] This is where the move really got going and we advanced about 231 percent from here.
[11:18] And we advanced about 231 percent from here during this stage two, but we want to be avoiding stocks in stage four no matter what you think about the fundamentals.
[11:22] No matter what the news says, the price action does not lie.
[11:25] That's the only opinion that really matters.
[11:27] And if a stock is in stage four, it's being distributed.
[11:32] And we want to be, you know, out of it, looking for other opportunities.
[11:36] There's always going to be a better opportunity for longs than a stock that's in a stage four downtrend.
[11:43] So that is pretty much a run-through of stage analysis and also using the de view indicator to add it to your chart.
[11:48] What you want to do is click indicators and strategies.
[11:53] You can type in DV and then you can go ahead and find DV stage analysis and that will add it to your charts.
[12:00] Um, and let's delete one of these.
[12:03] I personally don't like having it completely overlaid on my charts.
[12:06] Depending on your style, you may like that.
[12:08] I personally like to go ahead and click those three dots, click move to new pane above, and then kind of move it like this.
[12:13] And then as I'm, you know, space.
[12:17] Like this and then as I'm, you know, space barring through different names, I can see cool, we're in a steep uptrend.
[12:21] We're forming out a base, you know, is a strong uptrend, things look good.
[12:25] I'll look for an entry on the short-term time frames on the daily time frame, which is my execution time frame.
[12:30] Oh, here we're in a stage four downtrend, I should avoid this stock.
[12:34] And then, you know, it just will switch and give a nice kind of visual indicator of the trend as you're going through ideas in watch list or different screens.
[12:42] So that's pretty much it for this video.
[12:45] Again, you can also screen by stage analysis, we'll have another video dedicated to that.
[12:49] Um, you can also add stage analysis and it'll show the stage here in your data columns.
[12:55] You can also go ahead and add it to your columns if you would like to.
[12:59] Um, but, you know, this tutorial here right now is just focused on the DUT indicator and we'll have another resource there for you guys showing how to do that.
[13:07] So that's pretty much it for today.
[13:08] Hopefully you guys enjoyed.
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[13:41] [Music]