Legend For Phase Chart:
1: Recovery-1: Warning
2: Accumulation-2: Distribution
3: Bullish-3: Bearish

Wednesday, February 20, 2008

6 Phase Trend Analysis

In the Technical Analysis Of Stocks & Commodities (Bonus issue 2007), Chuck Dukas analyze trends by breaking up prices into 6 phases,
1. Recovery phase
2. Accumulation phase
3. Bullish phase
4. Warning phase
5. Distribution phase
6. Bearish phase

The author uses the following rules to define phases:
1. Recovery Phase
Close > 50 DMA
Close < 200 DMA
50 DMA < 200 DMA

2. Accumulation Phase
Close > 50 DMA
Close > 200 DMA
50 DMA < 200 DMA

3. Bullish Phase
Close > 50 DMA
Close > 200 DMA
50 DMA > 200 DMA

4. Warning Phase
Close < 50 DMA
Close > 200 DMA
50 DMA > 200 DMA

5. Distribution Phase
Close < 50 DMA
Close < 200 DMA
50 DMA > 200 DMA

6. Bearish Phase
Close < 50 DMA
Close < 200 DMA
50 DMA < 200 DMA

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