Please define target volume. I assume once a price crosses a pivot point at target volume a buy alert is issued? (October 30, 2002)
Target volume is the volume we look for on the move we are anticipating. It is not always automatic, that is, stock hits buy point, volume is at target, buy order put in. It is great if the stock is at, close to, or above the target volume when the stock hits the buy price. That usually happens later in the session or if there is some major buying early in the session with institutions getting on the stock early. That makes it relatively easy. Many times, however, volume is not there. Most volume occurs in the first and last hours of a session. If volume is not strong in the first hour and the stock is hitting the buy point we will fight the urge to move in too early. We prefer to let the action unfold and see whether volume builds. In many cases if volume is not there a stock will have a hard time holding the move. We prefer to see how it is building throughout the session. If it is on track when we check (e.g., 50% of target at lunch) it could be worth taking a position. Heading into the close we have a better picture of the volume and the intraday price action. If the stock is holding up well, i.e., has not reversed intraday off its highs or given the move back, we can move in at that time as well as we have a very good picture of the stock's performance on the breakout or other move we are looking for. We can often get in on a small pullback in the last half hour as some of the day traders take some gains that temporarily pressures the stock.
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