Weinstein's 4 Stages

Stan Weinstein's stage analysis divides a stock's lifecycle into four phases:

Price
  |          Stage 2              Stage 3
  |         (Advancing)          (Topping)
  |          /\    /\    /\      ________
  |    ____/   \/    \/    \____/        \
  |   /                                    \    Stage 4
  |  / Stage 1                              \  (Declining)
  | /  (Basing)                              \___
  |/                                              \___
  +------------------------------------------------→ Time
       MA200 flat    MA200 rising   MA200 flat   MA200 falling

• Stage 1 (Basing): Stock trades sideways, MA200 is flat. No trend.
• Stage 2 (Advancing): Stock is in a confirmed uptrend, MA200 is rising. This is the ONLY stage to buy.
• Stage 3 (Topping): Stock stops making new highs, MA200 flattens. Distribution phase.
• Stage 4 (Declining): Stock falls below MA200, downtrend confirmed. Avoid or sell short.

The key insight: 90%+ of major stock market winners were in Stage 2 during their biggest advance. Buying Stage 2 stocks eliminates the vast majority of losing trades that come from buying too early (Stage 1) or too late (Stage 3/4).

The 8 Conservative Criteria

AlpharvestPro's Stage 2 Conservative Filter goes beyond basic Weinstein analysis. It combines 8 stringent criteria to find only the highest-quality Stage 2 candidates:

All 8 criteria must be met simultaneously. This is deliberately strict — it filters 14,000+ stocks down to typically 50-150 candidates.

Why "Conservative"?

Most Stage 2 screens only check criteria 1 (price above stacked MAs). Our conservative filter adds 7 additional checks to avoid common traps:

Trap 1: Extended stocks

A stock can technically be in Stage 2 but already up significantly from its base. The price/MA150 ratio and advance ratio caps prevent buying these late-stage runners.

Trap 2: Low-quality uptrends

A stock barely above its MA200 with an RS of 55 is technically Stage 2 but not a leader. The RS ≥70 and Minervini ≥8 criteria ensure you only buy the strongest stocks.

Trap 3: Fresh breakouts too close to resistance

The "days since 52-week high" filter avoids stocks at the very top of their range while also excluding stocks that just broke out yesterday (wait for confirmation).

Reading the Stage 2 Report

The Stage 2 Candidates report shows a checkmark (check mark) for stocks passing the 8-criteria filter:

Focus on stocks with the checkmark AND high RS Rating. These are the candidates worth deeper analysis.

Combining with Other Screens

Stage 2 Conservative Filter works best as a pre-filter before looking for entry signals:

14,000+ stocks
  → Stage 2 Conservative Filter → ~100 candidates
    → Entry Signal (PP/BGU/U&R) → ~10 actionable
      → Risk Management → Position sized trades

The filter reduces noise by 99%+. Instead of scanning thousands of charts, you focus on ~100 stocks that meet all structural requirements.

FAQ

What percentage of stocks typically pass the conservative filter?

About 1-3% of the total market. In strong uptrends, this rises to 3-5%. In corrections, it can drop below 1%.

Is there a non-conservative Stage 2 filter?

Yes. The standard Stage 2 check (criteria 1 only — stacked MAs) catches more stocks but includes many lower-quality setups. The conservative filter's additional 7 criteria improve the hit rate significantly.

How often does a stock's Stage 2 status change?

Gradually. A stock doesn't jump from Stage 1 to Stage 2 overnight — the moving averages take weeks to align. Similarly, Stage 2 to Stage 3 transitions happen over days to weeks, giving you time to adjust.