If you want to use this feature in Custom Stock Status, please follow these steps:

1. To activate the rule, please go to: System > Configuration > Custom Stock Status

2. On General tab find "Activate rules for Quantity Range Status" and switch it to "YES"

3. Go to: Catalog > Attributes > Manage Attributes > Custom Stock Status Qty Rule

4. On Manage Label/Option tab create some Options for the attribute

5. Go to Catalog > Attributes > Manage Attributes > Custom Stock Status

6. On "Quantity Range Statuses" tab specify Statuses and Ranges for each Rule

7. Now you are able to edit rules for each product. Go to Catalog > Manage Products > Choose any product and specify the rule for it on the general tab.

Make sure to switch "Use Quantity Ranges Based Stock Status" to "Yes"