Trading Near Buy Point
Hi Marty,
Do you have any posted material on your strategy for determining your buy points?
I understand your standard buy points, but not clear how to come to your others.
Sincerely,
David
David,
Thank you for your question. There are many strategies used to buy stocks and mine are mostly determined by market conditions. Each stock has its own personality and this is art and not a science. The markets are rewarding buys on pullbacks more than breakout right now. Therefore, a stock setup like DXCM.
DXCM This stock setup is appealing to me as it broke out and drifted lower to a moving average in lighter volume. The buy point is the moving average (roughly $113.00). But, we need to see a bounce and some institutional support before getting aggressive. The thought process sis that institutions take time to establish a position and do not do it all at once, and we need to follow the institutions. If we missed the breakout then we can buy the pullbacks to moving averages
AMGN This stock has the same pattern as it broke out and pulled back to moving averages. If you bought the breakout then you are likely to be underwater. I create a buy point at the moving average (roughly $280.00). But, the caveat is that we need to see a bounce preferably above the prior day's highs.
We must always know the relationship between our stocks and their moving averages. I hope this answers your question.
Regards,
Marty
Yes. That is helpful as I am here to learn and not just go by your buy points.
Q1: When posting your buy point, could you add a brief explanation? Such as DXCM, 'The stock is trading near its buy point of 113.03 on pb to ma.'
Q2: Do breakouts and pullback to ma get different stops or do you usually stick to 4-5% (saw that referenced by you somewhere)?
Thank you in advance for your time.
