One Way To Enter Growth Stocks
After a substantial run, most
stocks need to digest some of those gains with some consolidation or pullback
action. Two- to three-day pullbacks are
typical, even in a stock that the institutions have shown a keen interest in. If
you happen to miss that first classic break out, remember to keep it on the
radar for possible entries as quick money and / or weak hands are shaken out on
lighter volume, before a potential resumption of trend. Also, see if the stock
can hold above its pivot breakout level, or above the classic 7% stop loss thru
this number. Stocks that show this ability ‘to hold up’, are more likely than
not, getting ready for another move higher.
Not every stock is going to fit the bill, so
to speak, but there are some clues that can lead you into the high-probability
issues that are more likely to be resuming their upward trend. First, if the
stock is truly a growth stock with a good story and numbers to back it up in the
present, you’ll find that these are the ones that are going to cultivate a
following amongst growth stock funds and institutional players. When buying
breakouts, this is what provides the jet fuel as these investors are afraid to
miss the next leg of what could very well be ‘the next big thing’ (at least in
the minds of Wall Street). Another key in the puzzle is the float available and
market capitalization. When both these figures are smaller, they usually add up
to something a whole lot bigger–if you know what I mean.
11:04:37
Intraday Setup Alert
Garmin (GRMN),
from the
Intermediate-Term Report, broke out last week on a large volume-thrust bar
higher. After two days of consolidation work, the stock is now forming an
intraday
triangle centered around prior 52-week highs, as it looks to resume its
trend higher. GRMN is up 1.87 at 51.87.
When the classic patterns emerge, and the growth
stock evidence is in place– you’ll find that these guys can have a nice-sized intraday growth spurt–just like our friend GRMN.