There have been lots of questions in this sub lately about how to know when is the right time to buy and I’ve commented in a few threads about watching for bases. It’s a crucial chart pattern to learn because most stocks over time will follow the same pattern through market cycles. The context here is that we’re in a recession bear market right now, which is very different from an event-driven bear market like the COVID crash. Recession bear markets don’t end with sudden V-shaped recoveries, so you don’t have to stress over potentially missing the bottom. You want to be patient and let the stages play out.
The 4 stages are pretty simple (I’m using some of my own language to describe them):
Have a look at the chart of PINS, which beautifully illustrates the four stages: https://imgur.com/beAJjgW
The key is to wait for the 4th stage to end and a new stage 1 base to start forming. PINS is very clearly in that stage 1 base right now, and threatening to break out. The moving average on the chart is the 40-week EMA, which is commonly used to identify the long-term trend. The buy signal would be a strong close above the base and above the 40-week EMA.