I Found 5 Stocks About to Enter Their Most Explosive Phase

Finding stocks before they surge is the whole game. Every serious trader wants that entry, and most never get it.

According to investing legend Stan Weinstein, there is one ideal place to buy. It happens right as an asset transitions from the Stage 1 accumulation phase into the Stage 2 markup phase. That window typically produces the most growth in a stock's entire cycle.

We are several years into a strong bull market. A lot of names, especially in AI and the stronger areas, are already up 200%, 300%, even 500%. So I scanned the entire S&P 500 and the NASDAQ 100 by hand. Not to find stocks ripping into new all-time highs, but the ones coming off their lows at a key breakout level.

Here is exactly why this works, plus five stocks sitting at this precise buy point right now.

What Is the Stage 1 to Stage 2 Breakout?

The exact moment big money takes control

The Stage 1 to Stage 2 breakout is the transition point where a stock moves from a quiet accumulation phase into an explosive markup phase. It marks the precise moment institutional buying pressure takes hold, and that produces the biggest growth in a stock's cycle.

Stan Weinstein is a former hedge fund manager, renowned as one of the best stage analysis traders of all time. His strategy is built around how institutions buy and sell stocks, and what that activity does to the name itself.

Master this, and you stop guessing. You start tracking the big money, which is the key to finding stocks before they surge.

The 100-Year-Old Wyckoff Method

Weinstein's work piggybacks off someone from the 1920s: Richard Wyckoff. He was the first to lay out these market stages.

I own a printed version of the typewriter book Wyckoff wrote a hundred years ago. I paid $400 for my copy. Original copies regularly sell for tens of thousands of dollars.

Wyckoff mapped out the four stages of the stock cycle. That cycle dictates everything.

Stage 1: Accumulation

This is where a stock is cheap. A value stock, bouncing off the lows, and honestly not very exciting to watch. It is typically where big institutions accumulate shares, buying at that value.

Stage 2: Markup

The markup phase is where the bulk of the profits happen. The stock is in demand. Revenues are growing, sales are growing, the story is good. Price sees a steady rise higher over months, sometimes years.

Stage 3: Distribution

The big institutional investors who drove the asset up have now reached full value. They want out, and they start exiting the position.

Stage 4: Markdown

This leads to the big markdown. Leading stocks typically fall 50% to 80% here. We are talking names like PayPal and Netflix, big mega-caps. They go down into Stage 4, enter a new Stage 1, then repeat into a new Stage 2 uptrend.

How Do You Scan for the Ideal Entry Point?

You do not need to overcomplicate this. No fancy screener required. All you need is a line chart with a 30-week moving average.

I went through about 600 stocks and filtered for a specific set of criteria to find names ready to move.

• Down 40% to 50%-plus from their highs
• Based out, forming a shallowing pattern off the low
• Emerging from a Stage 1 base into Stage 2
• Breaking out above the 30-week moving average

When price comes down into a big Stage 4 markdown, it eventually hits the accumulation base below the horizontal line. Then it breaks out while above the 30-week moving average. Weinstein identified two buy points here: the first exit, then a retest at point B for the push higher.

5 Stocks Entering the Markup Phase

Five names meet this exact criteria right now. Each is transitioning out of its lows and crossing that 30-week moving average.

1. Toast (TOST)

Toast fell from the low 50s all the way to the low 20s, about a 60% drop. From there it came in, deepened, shallowed, and tightened up right above the 30-week moving average. It is now just breaking out into highs.

As a line chart, you see a small peak, a shallow dip, a deeper one, then a nice final wedge before the push higher. Toast is still posting strong earnings growth and strong sales growth. This is not a company hemorrhaging cash. I filtered down to names with decently strong fundamentals.

2. Ryan Specialty Holdings (RYAN)

Ryan Specialty Holdings is not putting up blockbuster 200% growth, but it has steady 15% to 20% quarterly growth in sales and profits.

The pattern mirrors Toast. Price fell from 77 down to 30, cut by 60% to 70%. You can see the accumulation phase down in Stage 1. It comes in, tightens up, breaks through the 30-week moving average, gets a little retest, and should be starting a new Stage 2 uptrend.

3. Veeva Systems (VEEV)

Veeva Systems saw a 50% decline from its peak at the end of last year. This one might be slightly early. I would like to see the final breakout a couple of dollars higher.

Same shallowing Stage 1 base holding above the 30-week moving average, pushing right up to 200. A strong day through 200 on decent volume triggers the buy.

4. Paychex Inc. (PAYX)

Paychex is a slower mover, around 3% a day, but it is playing out perfectly. A one-year decline took it from 160 down to 85. It broke out above the 30-week moving average, hit the retest, and bounced like clockwork.

It sits at 111 now and is trending higher. These patterns are never perfect to the penny. Wars happen, events happen. What matters is the overall structure.

5. CLA Group (KLAR)

This might be the one I am most excited about. CLA Group, ticker KLAR, is a recent IPO that went public in September of 2025, so it is almost a year old.

The first Stage 2 breakout in a fresh IPO has historically been the single best place to buy a stock for the long term. Most IPOs follow the same script, and we are seeing it with SpaceX too. They price the IPO, it jumps on opening day, makes a push, comes down, hovers near the IPO price, gets crushed on valuation, builds a position, then starts its long-term move higher.

KLAR hit $556 a share and fell all the way to 12. From there it formed a textbook Stage 1 base off the lows. It shallowed beautifully, broke through the 30-week moving average, had a perfect little retest, and looks ready to move.

What Does the Markup Phase Look Like in a Stock Chart?

On a chart, the markup phase begins when price breaks out above the 30-week moving average after a long consolidation. You typically see a first exit above that line, followed by a brief retest of the breakout level, then the push significantly higher.

The chart tells the story. The 30-week moving average cups right underneath the final handle of the price action. Everyone wants to know which stocks have 1,000x potential, but the smartest money focuses on reliable doubles and triples, bought at the exact transition from Stage 1 to Stage 2.

Finding Stocks Before They Surge

This takes patience and discipline. You cannot chase names already up 500% and ripping into new all-time highs. Finding stocks before they surge means doing the opposite of the crowd.

You have to hunt the assets that got crushed, built a solid accumulation base, and are only now breaking above their 30-week moving average. That is how you find stocks before they surge.

Watch TOST, RYAN, VEEV, PAYX, and KLAR. All five meet the exact criteria laid out by Stan Weinstein and Richard Wyckoff for a new Stage 2 breakout.