[[Start here]] → [[What works in stocks?|what works]] → [[expose to return drivers|drivers]] → [[strong stocks beat weak stocks|strong beats weak]] → volume breakouts --- Stan Weinstein identifies that [[share prices exist in four stages]]. At the end of a Stage 1 Consolidation period, it's not uncommon to see a significant change in trend start on a volume breakout. If you can identify stocks with extremely strong volume surges, it can be an indicator of demand (often institutional) and lead to a more propulsive change of trend into Stage 2. It's a key buy point. ![[weinstein-volume-breakouts.png]] The initial breakout is prone to failure, and can lead to losses. Buying on the first pullback after the breakout is a less risky time to enter. The odds are more substantially in your favour, but you can miss out on some of the most propulsive winners if you wait. Buying the initial breakout is only recommended when there are significant confirming catalysts (fundamental or otherwise). Traders are more likely to wait until there is already a confirmed "Stage 2" uptrend in place before entry. They will often wait for **the first base after the trend has started** before participating. Stocks in Stage 2 can base multiple times before topping, and often all are tradeable, but risk heightens on the way up. ![[weinstein-stage-2-breakouts.png]] Mark Minervini only ever buys stage 2 stocks - he suggested a stage 2 trend filter which we've mostly replicated at Stockopedia in [this Minervini-esque stock screen](https://app.stockopedia.com/screens/p-minerviniesque-stage-2-filter-1340795). Minervini has become known for his Volatility Contraction Pattern (VCP), which is essentially a wedging pattern between support and resistance in a base. It's illustrated above as a wedge pattern where the support line rises towards resistance. This is a good indicator that selling pressure is dissipating, and buyers are soaking up the supply.