I don't understand what this "buy up to 'price' " means. If I buy a stock at 19.60 and the target is 20.58, do I sell at 20.58? Is that a point at which you think it could [start a] re-test the breakout and go down? I know NOT to buy higher than 20.58, but do I hold it at that price? (August 20, 2001)
The two targets are discrete: First ("a buy up to..."), we will buy on a breakout move up to 5% over the breakout price. That is just our standard target for buying ON THE MOVE, because once the stock gets over 5%, it has already made a good move and more likely ready to take a breather, and we don't want to buy at a point where the stock could then test the move and potentially take us out via a stop loss right off the bat on a simple test of the breakout (using a 7% stop loss). We'd much rather buy right at or just after the breakout to be assured of the maximum gain on this move, and that 5% gives us room to do that. Second, the target (the higher price) is how far we think the stock will go, either for the short term or for the long term--it is for the bigger picture. Sometimes you will see that we say "initial" target. That means that we think the stock will at least get that high for the present time, and we might adjust that higher once the stock gets over that initial target. Most of the time an initial target coincides with resistance levels if the move was not to a new high.
So you see that the breakout target ("a buy up to...") is separate from the initial target or some longer-term target. Once the stock gets to 5%, you can hold it by riding a pullback, or get out and then get back in when and if it starts to head back up after a pullback.
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