STAGE 1 (ACCUMULATION):
In this stage the stock consolidates in a narrow price range which usually lasts for months but in some cases years and then breaks on the higher side.
STAGE 2 (ADVACVING):
In this stage the stock price moves in a higher high and higher low structure.
STAGE 3 (DISTRIBUTION):
In this stage the stock price consolidates in a narrow range and then the price breaks on the lower side.
STAGE 4 (DECLINING):
In this stage the stock price moves in a lower high and lower low price pattern.
The only way to make big money is to identify these stages and buy the breakout at the right time.
I have also attached a diagram to show show the four stages. Please do have a look.
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