trend
essential
Stage 2 (Markup Phase)
Stan Weinstein's uptrend stage — the only phase where breakout setups have a high success rate.
The Stage 2 concept comes from Stan Weinstein's "Secrets for Profiting in Bull and Bear Markets." Stocks move through four cyclical stages:
- Stage 1 — Basing: long sideways after a decline. Volume is low.
- Stage 2 — Markup: sustained uptrend, higher highs and higher lows, price above 30-week MA.
- Stage 3 — Topping: choppy sideways after a long advance.
- Stage 4 — Decline: sustained downtrend.
Why Stage 2 matters
Empirically, breakout setups in Stage 2 succeed 2-3× more often than the same setup in Stage 1 or 4. Swing Edge therefore treats Stage 2 as a hard prerequisite for "Very Strong" / "Strong" pre-breakout signals — being in a healthy uptrend on the weekly chart materially raises the odds of follow-through.
Checking Stage 2 quickly
- Price > 30-week (≈ 150-day) moving average.
- 30-week MA itself is rising over the last 4–6 weeks.
- Weekly chart shows higher highs and higher lows.