You provide a volume figure next to your buy points. Do you recommend extrapolating volume, or wait till volume reaches suggested level even though buy point is surpassed? (January 21, 2003)

  We always like to see strong volume on any move as that shows there is a lot of support for it. That gives it more likelihood it will hold. As you have pointed out, what happens if the price is hit and the volume is not there? Extrapolating is necessary. If it is a strong move you will see volume already running up. Check for block trades and see if any are being made. If volume is solid early we can enter some positions. If the buy point is hit later in the session we get a much better view of the volume picture and how strong the move is.

If there is very low volume early on we will typically just let a stock run in this market and check it later to see if volume is coming in. We would rather not jump on a stock that is moving but has very low volume; that is often a recipe for trouble. If we really like the stock and it has some solid early volume (25% of target or so) we can always take a partial position. We can complete the buy later in the session if volume is strong and the stock has not just run away. If it has made a run we can wait for a pullback (usually get one of some degree) to occur and when it starts back up then complete the buy. That way we let the stock show us it is ready before we commit all our funds.


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