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- The objective is not to buy at the cheapest price when the probability of the stock having a huge move may be only so-so.
- The objective is to buy at exactly the right time — the time when the chances are greatest that the stock will succeed and move up significantly.
- I found through our detailed historical studies that a stock purchased at this correct “pivot point,” if all the other fundamental and technical factors of stock selection are in place, will simply not go down 8% (your protective sell rule), and has the greatest chance of moving substantially higher. So ironically, if done correctly, this is your point of least risk.
- On the day the stock breaks out, its trading volume should increase at least 50% above its average daily trading volume.