Stan Weinstein's Stage Analysis

Another way to play the recent precious metals breakdown is through the PM stocks. Of which, Hochschild Mining (HOC.L) is currently making a fresh Stage 4 breakdown.

Am liking today's short covering rally. All of my open positions have moved into profit for the first time together. And DUK and SE have made new all time highs. Hopefully, it will continue.

Here's the latest US Industry Sectors charts. Utilities (XLU) continues to outperform with Consumer Staples (XLP) close to breaking out into a Stage 2 continuation. So it's worth looking through the Consumer Staples sub sectors to see what's outperforming and filter down to the individual stocks from there.

Pfizer (PFE) made a Stage 2 breakout with a 52 week high yesterday (20th). The Industry sector (Health Care) and the sub sector (Pharmaceuticals) both look reasonable. Pfizer is outperforming both of them by roughly 8% and is also outperforming the S&P 500 by the same amount. So the relative performance requirement is in place.

What I need to see now is a pick up in volume if it breaks higher, but if I take it, I'll only take a half position as recommended by the buying guide section as this is an investor entry point. With the idea to buy the remaining half position after the first continuation pivotal point is formed.

The monthly shows there's old resistance from the 2005 and 2006 range up to $29, but that still gives it room to move and old resistance is over 2 years old and so is less relevant.

Daily ATR(200) is: 0.42 points average movement per day or 1.96% as a percentage.
Weekly ATR(52) is: 0.89 points average movement per week or 4.15% as a percentage.

The investor stop position below $18 is over 8x the daily ATR(200), so a closer stop below $19.70 might be more suitable using the daily chart. But for the least risk you would need to wait for the breakout to pullback and form a new pivot point.

Here's the charts

I've set up a blog so I can organise all the stuff in this thread and I've made a page that has the S&P 500 stocks listed with their industry sector and their sub-sector. It has a search facility so you just need to type the ticker or the stock name or the sector and it will find it. Here's the link: S&P 500 « Stage Analysis

Another utilities stock hitting all time highs is Consolidated Edison (ED), which has had a very nice Stage 2 continuation breakout after forming a continuation pivotal point at the all time high and moving to new highs.

The breakout point has been missed but a pullback to that level and reversal higher would be a good position to get in risk reward wise. So I'll be watching for a pullback to $60 to possibility get in this one.

Dividend is 3.9%

Attached are the charts

Two of the the major industry sectors made Stage 2 breakouts today, with both the Utilities sector (XLU) and the Consumer Staples sector (XLP) hitting new 52 week highs. So these are the industry groups that you should be focusing on if you are trading on the long side and following the method.

Here's the charts

ED is a great example of the Weinstein stage analysis method and using Moving Averages and correction high/lows to set stops.

Using Stan’s approach of a weekly chart and the 30-day MA, you would have been stopped out in mid February 2011when ED violated the 30-day around $48.55 but then you would have bout it back shortly and still holding it now for an excellent gain (plus dividends).

Using a daily chart, the best support area is at the 150-day MA which only triggered a few sell/buy signals during this year with only three low risk entry points.

Question for the group:

How are you using a combination of weekly and daily charts and Moving Averages to make your buy/sell decisions when combined with Stan’s stage analysis?