"Stage 4 decline" technical analysis like this doesn't work on stocks where investors recognize value. I like @TedHZhang's approach for commodities and other assets (that also have right-tailed skew). Ted would be right if we were looking, at say, a Uranium commodity. When investors see value, they sweep in and buy at key levels. You have to distinguish between the type of asset you are looking at. CFA Level 4