Invest and Trade Profitably with Jon Johnson

I have been using your service for 3 weeks. It has proven to be well worth the cost on trades I have made. I do have a question. When I receive your advice on Monday, it has new plays and current plays. Am I to assume that if a trade is not on the current play list, that you have dropped it? I am also confused with your buy point methods. If a stock hits your buy point during the day and volume has also been reached, is that the time you suggest buying? You give the buy point but no guidance as to when to make the purchase if your criteria are hit.

August 30, 2000

Glad to hear that our service is of benefit to you!

All stocks that are in the report will be listed in the continuing play table, even if they have not hit the buy point and thus no action has been taken with them. Stocks on the report that have been removed from the list are first noted as ‘exited’ but then dropped in the next report.

When to enter a play in terms of volume when a stock has hit the buy point is a question frequently asked. While entering a play is preferable when a stock hits the pivot and targeted volume simultaneously, many times when a stock makes its buy point volume hasn’t reached that magic number. At that point other factors come into play that influence decisions about taking action.

In many instances when a stock breaks out over resistance (and that means it’s hit the buy point) it is with a volume surge that is well on the way to reaching target volume. At other times, volume isn’t as strong but is moving well and consistently though not near the target. If the movement of the stock is consistent as well, which means it is not moving up and down in a volatile manner, or is moving with little direction or with volume waning, we will take partial positions early and wait to see what volume does later that session. If it does what we want, the rest of the position can be completed toward the close. Sometimes these buys are even completed in a later session when the stock gives another entry point, if it looks like the previous day it may pull back first before continuing the move. In essence we usually wait to see how the stock and its volume fares in the morning, since the first volume push of the day occurs at that time, unless the stock is in a really good pattern when it makes the first move and we want to be in on that from the start. It can depend upon the market; sometimes it is best to wait until the end of the day (when volume tends to surge as well) to see how price and volume are working for each stock we are watching.

At no time should you enter a play once a stock has moved 5% beyond its buy point. In that case, wait for a pullback to support on waning volume, then look at new positions on a bounce back up from the support—on strong volume. We are always watching for such pullbacks to support and will post new buy points on such plays.

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