| Stocks Trading Strategic Buy Point |
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When a stock forms a proper cup-with-handle chart pattern and then charges through an upside buy point, which Jesse Livermore referred to as the "pivot point" or "line of least resistance," the day's volume should increase at least 50% above normal. It's not uncommon for new market leaders to show volume spikes up 500% to 1000% during major breakouts. In almost all cases, it is professional buying that causes the big, above-average volume increases in the better-priced, better-quality stocks at pivot breakouts. Ninety-five percent of the general public is usually afraid to buy at such points because its scary and seems risky and rather absurd to buy stocks at their highest prices. The object isn't to buy at the cheapest price or near the low but to begin buying at exactly the right time, when your chances are greatest for success. This means you have to learn to wait for a stock to move up and trade at your buy point before making an initial commitment. The winning individual investor waits to buy at these precise pivot points. This is where the real move starts and all the exciting action begins. If you try to buy before this point, you might be premature. In many cases the stock will never get to its breakout point, leaving you with a stock that has stalled or may actually decrease in price. You want a stock to prove its strength to you before you invest in it. Also, if you buy more than 5% to 10% past the precise buy point, you are buying late and more than likely, you will get caught in the next price correction.
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