What Is a Stage 2 Candidate?

To count as a Stage 2 stock, a stock has to check every box in WealthLab's own set of rules — a proprietary list of 8 conditions it has to fully meet before it's officially tagged Stage 2.

A Stage 2 Candidate is a stock that's close, but hasn't checked all 8 conditions yet.

Think of it as a stock that's setting up. It's showing enough of the right signs that it has a real chance of qualifying soon, but it hasn't strictly met all the criteria — so WealthLab keeps it in its own separate bucket instead of calling it Stage 2 outright.

Why Keep Them Separate

Lumping candidates in with confirmed Stage 2 stocks would blur two genuinely different things — a stock that has fully qualified, and one that's still on its way there. Keeping them apart means you always know which is which.

Common Questions

Does being a Stage 2 Candidate mean a stock will definitely become Stage 2?
No. It means the stock has a high chance of qualifying, based on how much of the criteria it currently meets — not a guarantee that it will.

What exactly are the rules a stock has to meet?
WealthLab uses its own proprietary criteria to decide this.

Why does WealthLab have both "Stage 2" and "Stage 2 Candidate" as separate labels?
Stage 2 Candidate was launched as a newer algorithm to identify Stage 2 stocks earlier — an early depiction, even if the stock's "actual" stage per classic theory is technically Stage 3 or elsewhere. Backtesting showed it identifies Stage 2 moves earlier with only a small (roughly 3%) increase in false signals, a trade-off considered worth it for earlier entries and wider coverage. Many users now treat Stage 2 and Stage 2 Candidate interchangeably in their routine.

How can I catch stocks that make a big move while still in Stage 1?
Keep an eye on the Stage 2 Candidates list — sharply advancing stocks are often flagged as candidates well before the move plays out.