Trading Lesson of the Week

• October 5, 2025
• YCBD | SAVA

In This Week’s Issue:

• Upcoming Events – Free Classes in October!
• Market Outlook – Action Improved Today
• This Week’s Market Minutes video – These Stocks Will Make Big Gains This Week
• Trader Training – These are the Phases in a Stock’s Upward Trend
• Strategy – Hot Stock Pullback Breaks

Upcoming Events – October Education Series

A free, four-part education series to help you be a better stock market investor and trader. Learn how I identify stocks with a great potential to move higher in the near term using my powerful tools and indicators. Everyone that attends will receive a free electronic copy of my book, The Mindless Investor.

Register by clicking here

https://www.stockscores.com/trader-training/upcoming-events/

My Simple Approach to Pick Great Stocks in Minutes

Tuesday, October 21, 2025 6 PM

Creating Wealth - How to Invest in the Stock Market Successfully

Wednesday, October 22, 2025 6 PM

Winning Trading Strategies - Day and Swing Trading for Part or Full Time Income

Thursday, October 23, 2025 6 PM

How Stockscores Tools and Education Can Help You Make Stock Market Profits

Saturday, October 25, 2025 6 PM

Market Outlook – Action Improved Today

The action picked up today, right on time as Earnings Season kicks off and traders come back to the market. Some strong movers today should be a catalyst for excitement in the low float space while the overall upward trend in large cap stocks will drive investor optimism in stocks overall. Some sectors of the market are getting extended so it is important to not chase parabolic trends but, instead, consider breaks of pullbacks in upward trends.

This Week’s Market Minutes Video – These Stocks Will Make Big Gains This Week

The stocks that can make big gains will almost always show a simple signal early in the upward trend. This week, I show what that signal is so you can find next week's big gainers early in their upward trends. Plus, I provide my analysis of the overall markets and look at the trade of the week on DFLI.

Click Here to Watch on YouTube

https://youtu.be/jbNGnrv78r4

Commentary – These Are the Phases in a Stock’s Upward Trend

Understanding the typical phases in a stock's price trend can be a powerful tool for investors looking to optimize their entry and exit points. Whether you're new to the world of stock trading or an experienced market participant, recognizing these phases can help you make more informed decisions. Let's take a closer look at the five key phases of a stock’s price trend:

1. Complacency: The Calm Before the Storm

In the Complacency phase, investors are largely indifferent to the stock. Interest is low, and the price trend remains relatively flat, often moving sideways with minimal volatility. During this period, there’s little excitement surrounding the stock, and most investors aren’t paying much attention to it.

Because of the lack of investor enthusiasm, price movement is minimal. This phase can last for a considerable amount of time, as the market waits for a catalyst that might spur action. While complacency might seem like a dull time for investors, it's important to note that these periods often set the stage for the next big move—either up or down.

Investment Takeaway: This phase should generally be avoided for buying opportunities. With little excitement around the stock, there’s limited potential for short-term profit, making it less attractive for traders seeking quick gains.

2. Surprise: The Spark That Ignites the Trend

The Surprise phase is marked by a breakout from the previously established sideways price range. The stock experiences an abnormal price gain, often accompanied by a surge in volume, signaling that something significant has changed. This phase is typically triggered by a new fundamental reason for investors to get excited about the stock—whether it’s a strong earnings report, a product launch, or positive news surrounding the company.

The price action during the Surprise phase is often rapid, and investors who notice the breakout early can take advantage of significant gains. This phase is the market's reaction to new information, and it reflects a shift in sentiment from indifference to interest.

Investment Takeaway: The Surprise phase can be an excellent time to buy. If you're able to identify the catalyst behind the breakout and confirm that it signals a lasting positive change for the company, entering during this phase can yield impressive returns as the stock moves higher.

3. Doubt: The Test of Conviction

After the initial breakout and surge in price, the Doubt phase sets in. Investors start questioning whether the higher prices are justified, and as a result, the stock often experiences pullbacks. These retracements allow for some profit-taking, and the price may temporarily dip before continuing its upward trend.

Doubt is a natural part of any strong price move. Some investors may get nervous about the sustainability of the rise, while others may see the pullbacks as a chance to lock in profits. However, for savvy investors, the breaks of these pullbacks often present buying opportunities.

Investment Takeaway: The Doubt phase offers a unique chance for investors who believe in the stock’s long-term potential to buy during the temporary price dips. If the stock holds its support levels and resumes the uptrend, it signals continued confidence in the story behind the rally.

4. Confidence: A Steady Ascent

The Confidence phase represents a period where the upward price trend consolidates, and volatility decreases. After the initial surge and the pullbacks of the Doubt phase, the stock moves in a more controlled and steady fashion. During this phase, price fluctuations narrow, and the stock may trade within a defined range as it builds a foundation for the next potential breakout.

At this stage, institutional investors and long-term buyers start to take notice, and the price action tends to smooth out. The market sentiment has shifted from uncertainty to optimism, as more investors begin to believe that the stock’s value is on a solid upward trajectory.

Investment Takeaway: The Confidence phase is a great time to position yourself for the next upward move. With the volatility decreasing, this phase often precedes a bigger price surge, making it an ideal moment for those who missed earlier opportunities to enter the stock.

5. FOMO (Fear of Missing Out): The Emotional Frenzy

The FOMO phase occurs when emotions take over and investors begin buying stocks at inflated prices simply because they fear missing out on further gains. During this phase, prices can become unsustainable as the stock rises rapidly, driven by a sense of urgency rather than fundamentals. The emotional frenzy fuels a buying spree, but it often leads to sharp corrections as reality sets in.

FOMO is a dangerous phase for most investors because it’s driven by herd mentality and fear rather than logic or sound investment analysis. Stocks in the FOMO phase are often overpriced, and while some investors may continue to chase the price higher, the risk of a correction looms large.

Investment Takeaway: The FOMO phase is best avoided. Emotional buying typically leads to overvaluation, and while gains may be possible in the short term, the downside risk is high. It’s crucial to maintain discipline and wait for more rational price levels.

The Best Phases to Buy

The most favorable times to buy a stock are during the Surprise, Doubt, and Confidence phases. These phases represent times when the stock is experiencing growth but is not yet overbought. Investors who enter during these periods often have the chance to capitalize on a sustained uptrend.

In contrast, Complacency and FOMO are phases that should be avoided. The former offers little opportunity for growth, while the latter carries the risk of overpaying for a stock, potentially leading to significant losses.