I have enjoyed and profited from your service for several years and have a question. How important is it for a stock to reach the target volume or better on a BO play or even a play where you note the target volume? I've been following your alert service and note that up to 80% of the alerts do not reach the target volume even though they reach the BO point. I regularly calculate the % volume using the % of the day that has passed and that doesn't help much. Keep up the good work you are the only service I now use and find your analysis of the market and economic situation invaluable. (June 3, 2002)
Your observations on the breakout are right on target: many times the price is met before the volume is met. As volume levels and intensity vary throughout a session it is often difficult to determine where the volume is exactly. It is easy at the end of a session or if there is an immense amount of early action on a stock. In most cases, however, it is relatively early in the session and the volume is decent but not flying. What do we do when the alert is hit? We look at the intraday volume and see if there is volume building on the move through the buy point. If we see that we will go ahead and enter into a position, but in this market we usually will not take a full position. We will take that position and then see what the volume is at the end of the session. If it is a good breakout, i.e., it holds the gains and volume is at or near our target (or blows it out on the upside) on that day, we will look at taking more positions late in the session. Or, we might wait until the next buy point, maybe after it rallies and then tests the 18 day MVA for the first time. Strong stocks will breakout and rally and then test the 18 day MVA; that is the next solid entry point. Thus we can work our way into a proven winner that is showing more strength than other stocks. That is a key in this choppy market.
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