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How To Reset The Base Count.(A)(INVESTOR'S CORNER)
Byline: DAVID SAITO-CHUNG
Readers often ask: How do you reset the base count for a stock?
All investors can benefit by nailing down this concept. Why? Knowing how to count bases helps you hone your selling skills and pick new winners.
During the life of a good stock's rally, it forms a series of bases, or resting periods before the next round of new highs. The decline in the base is mild compared with the previous uptrend.
The more bases a stock builds, the higher the risk that its next breakout will flop and trigger a major sell-off. Few stocks can build a good third-stage base and rally higher.
Even fewer can etch a fourth-stage base. When this happens, everybody and his buddy knows about the stock -- a bad sign, because few new investors are around to propel the stock higher.
So when a breakout from a late-stage base fails, it serves as a key selling signal. As the stock declines, watch to see if it undercuts the low of the most recent base. If it does, reset the base count.
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- Magazine article from: Investor's Business Daily June 7, 2005 700+ words
...from such a late-stage base might fail. Or...you can reset the base count. Keep in mind...form a new first-stage base. They must still...start of the flat base, count it as a separate...shaped, late-stage base. Shares pulled...
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- Magazine article from: Investor's Business Daily March 10, 2006 700+ words
...that immediately preceded it, the base count is reset. Of course, successfully...pattern doesn't count as the new-stage base. That type of consolidation is...base, 49.68, which reset the base count to one (3). The Baltimore...
- If A Stock's Late-Stage Base Fails, The Decline Can Be Fast, Furious.(MAKING...
- Magazine article from: Investor's Business Daily July 26, 2004 700+ words
...base. Resetting the base count is a tricky topic. As...base, you reset the base count to zero. Education stocks...started shaping a third-stage base that month (1). Note...coming out of a third-stage base. Corinthian cleared...
- Take Profits Fast When A Late-Stage Base Fails.(A)(INVESTOR'S CORNER)
- Magazine article from: Investor's Business Daily January 15, 2003 700+ words
...rallies at least 30% from its prior pivot. When you see a flat base or cup on top of a longer base, count it as one whole base. (For more on the base count, please use IBD Archives, found near the bottom of the home page on investors.com...
- Look For Resilient Stocks During Down Days.(IBD BIG CAP 20)(INSIDE THE BIG CAP...
- Magazine article from: Investor's Business Daily December 20, 2005 700+ words
...in lower volume than seen during its uptrend of prior weeks. Its RS line has also moved higher in the last five weeks. Note that EOG is trading near the top of a third-stage base after resetting its base count in January of this year.
- Deep Correction Resets Base Count.(A)(INVESTOR'S CORNER)
- Magazine article from: Investor's Business Daily November 12, 2001 700+ words
...through a steep correction. Now it 's time to reset the base count. Remember, only a few stocks have the power to form a brand...breached the low of its previous base. Time to reset Cisco's base count. It took nearly 13 months to craft a cup-with-handle...
- SFBC International Resets Its Base Count.(B)(NASDAQ STOCKS IN THE NEWS)
- Magazine article from: Investor's Business Daily August 3, 2005 700+ words
...In carving its pattern, it undercut the low of its previous base formed between July and November 2004 -- resetting its base count. The Miami-based company conducts clinical phase trials for drug firms. Last December, it bought PharmaNet, which also...
- Abercrombie Corrects,Resets Its Base Count.(B)(NYSE STOCKS IN THE NEWS)
- Magazine article from: Investor's Business Daily December 22, 2005 700+ words
...downside volume in the left side of the base raises a red flag. The current pattern undercut a prior base, resetting the base count to a first-stage consolidation, with a 40% correction. The stock flashed a shakeout Dec. 1. It's since wedged up...
- Alaris Medical Etches Risky Late-Stage Base.(B)(NYSE STOCKS IN THE NEWS)
- Magazine article from: Investor's Business Daily November 17, 2003 700+ words
...in the coming weeks, form a handle and break out. It's 18% off its high. The stock is working on at least a third-stage base as it continues its long run-up. Note that late-stage bases are more prone to failure than stocks just getting started...
- Chico's FAS Near Top Of A Late-Stage Base.(B)(NYSE STOCKS IN THE NEWS)
- Magazine article from: Investor's Business Daily November 8, 2002 700+ words
...Thursday. The stock has formed a somewhat sloppy base, with resistance around 21. The latest consolidation is also a fourth-stage base, a red flag given the poor success rate of late-stage bases. The women's clothing retailer said October same-store...