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From IBD 8/21/14

Important to do as late stage bases are prone to failure (because everyone has now discovered this "hot" stock, so not enough buyers left). They say up to 80% of fourth stage bases fail.

How to Count? first only count valid bases. They must have completed their minimum length: 5 weeks for flat base, 7 for cup with handle or double bottom. You can't just count all the "bases" you see, a stock must rise 20% or more out of a valid base pattern before that counts in the base count. If it goes up 15% then forms another base, that is a base-on-base and doesn't count.

If a base undercuts the low of a prior (valid) base, then it resets the base count so the new base is a first stage base.
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