A question regarding revisted stocks. When a stock that was a previous play that hit the buy point, if we already purchased this stock the 1st time and it comes up as a revisited play, would that be an add to point if it hits the buy point listed on the revisited play. Would that be a strong stock that is testing the breakout? (January 4, 2003)
Good question. There is more than one point to buy a good stock. Contrary to what some investment advisors think, a great stock will give you more than one entry point. Stocks run higher then test the moves continually. They breakout, run, test back, run some more. We can use those tests as entry points as long as the stock continues to show good action, i.e., making higher lows and showing good price/volume action as it does (rising on the move up, falling overall on the move back down). We like to focus our money in stocks that are doing well, stocks that are showing accumulation and winning attributes. That way we get more money into winners as opposed to spreading our money too thin in so-so stocks. That is why we were selling several positions before year end to free up money and also book any loss so we could write it off.
For revisited plays that have already hit the buy point we are viewing that as a good entry point for add-to positions or new positions. It is showing continued good action, something we want to take a greater part in. In that sense it is one of the stronger stocks because it continues to show good performance and it is at a point where it is a natural buy. If it continues its ways it will be a solid entry point. At the current time we are riding several stocks well past their target price simply because they are showing very good continued action. We have been letting them run and averaging into more and more positions in the stock as the opportunity is presented.
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