Today I intended on buying EMLX as per your recommendation in last night's commentary. I missed the boat due to being tied up in another position. Now, your buy point was 40.19 I believe. By the time I was able look at playing EMLX it was already at 41.70 but in he process of pulling back. Then the question occurred to me that maybe buying at the initial buy point after running up like that might not be such a good idea. So, my question is, your buy points: is that after breaking it for the first time, or is a run up over that level and then pullback to that level just as good? (December 27, 2001)
You have hit on something that we often do when we too miss the buy point on the first move. EMLX was moving again on solid volume for the session. Often when a stock is moving well and breaks over the resistance point, it will come back to test that level to some degree before moving up again. That is what it did today, and it is perfectly fine to buy as it tests that level and starts up again. Indeed, even if we catch the initial move, we will often add a few positions when it successfully tests the move. Either point is a good one, and just as there is not only 'one' buy point on a stock's run, there is not just one entry point during a session. You are also correct that it is not necessarily the best time to buy when the stock has made an uninterrupted run for a half hour; it invariably comes back a bit before it rallies further. We cover what levels act as support on these intraday moves in our online seminar series, but the point is we want to buy as close as we can to the buy point, and an intraday test of that level is a good one.
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