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1st Stage Bases following Accumulation Below the 40 Week MA

by Erik Grywalski

Note:  The historical stock examples given in the link below are for EDUCATIONAL USE ONLY.  They ARE NOT to be used to make buy/sell decisions in today's market.  For more information, please read the HSR Terms of Use.

Accumulation behaviors below the 40 Week MA may lead you to new investment ideas.

After a stock gets back above its 40 Week MA, it may form its first base (1st stage base) before breaking out and trending higher.

To find stocks forming 1st stage bases above the 40 Week MA, look for the following sequence:

Step 1:  Period of accumulation below the 40 Week MA.

Step 2:  Price thrust AND close above the 40 Week MA.

Step 3:  Price trends higher or bases.

Step 4:  Price forms its first base above the 40 Week MA (if a trending move develops in Step 3) or breaks out (if a base develops in Step 3).

Step 5:  Price breaks out (for stocks that based in Step 4).

The charts below may help you identify this process in future market cycles.

Please >>CLICK HERE<< for the historical charts.