Stage 2 Bases

Stage 2 Bases

What is a Stage 2 Base?

• Stage 2 = Advancing Phase in Stock price cycle.
  
• Stocks in Stage 2 are in uptrend (50 > 150 > 200-day moving averages).
  
• A pause (consolidation) in an ongoing uptrend.
  
• Price moves sideways for weeks to months after an advance.
  
• Builds energy for the next leg up and allows accumulation.
  
• Strong prior uptrend before the base.
  
• Base length typically 4+ weeks.
  
• Base depth generally 10–40% pullback.
  
• Volume contracts during consolidation.
  
• Breakout occurs above prior highs on strong volume.
  

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Why They Matter?

• Institutions accumulate shares during the base.
  
• Resets overbought conditions without breaking the trend.
  
• Valid breakout often leads to next strong rally.
  

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How to read this indicator?

• Complete Stage 2 bases in Daily Timeframe
• Complete Stage 2 bases in Weekly Timeframe

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Key Characteristics

• Works on Daily and Weekly Timeframes
  
• Past Stage 2 Bases are marked as well
  
• Base Counts, Depth, Consolidation Range, Move from one base to another and No of days/weeks move are marked
  
• Base 1 are marked when a stock is coming out of Stage 1 (After Golden cross 50SMA > 200 SMA)
  
• Base count is increased when a move from base is more than 20% (Can be modified in Indicator settings)
  
• Base resets to 1 when the base undercuts the previous base
  
• Base markings are stopped when the 200 SMA > 50 SMA
  

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Indicator Settings

• 

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Limitations

• Base markings are stopped when the 200 SMA > 50 SMA but if a stock doesn't go down beyond 40% and the Price action is good within the base then its good to keep the stock in watchlist. This scenario is not handled.
  

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Disclaimer

• This indicator is created purely for educational and informational purposes. It is not a buy or sell recommendation, nor should it be considered financial advice. Trading and investing in the stock market involves risk, and you should do your own research or consult with a qualified financial advisor before making any investment decisions. The creator of this indicator is not responsible for any losses incurred by using this tool.
  

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