HSNI and the four stages

HSNI and the four stages

Like the complete business cycle, stocks go through four distinct phases, accumulation, markup, distribution and decline.

In the accumulation stage stocks are in their cyclical low forming a base, the smart capital is guzzling on the stock at low prices, anticipating a markup. It is a very safe stage for buying a stock. The only danger is the time risk.
After the stock breaks a resistance area with high volume, the momentum carries the stock higher and with soaring speed. This phase is named the markup. At this stage is where the most money is made.
After the upward movement ends, the price begins to slow until it starts trading sideways, the smart money is distributing the stock to the dumb money before a decline begins.

Look at this chart of HSNI, on February 25 the stock broke out above the 21 resistance, then in 14 trading days the stock climbed to a close of 29.64 on March 17. That is a 40% gain in less than a month.

In the stock closes below 29 be in a lookout for a fast decline, if the stock breaks over 30 with high volume maybe the stock will restart the upside move.

I am in short land for now, so my only trade in this stock would be below 29 in the following days.