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Strategies & Market Trends : Strong Industry Groups - Strong Stocks
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To: Sam Raven who started this subject1/24/2002 1:55:45 AM
From: Sam Raven   of 1567
 
I got an e-mail asking about buying above the support range. There have been several picks, BBY, CHS, TJX, and WSM today that took off without dropping into the buy range. The buy range is a mathematical calculation to provide the best risk reward. By buying above the support you decrease your potential gain and increase your potential loss if you wait for it to fall through bottom of support before stopping out.

However, the stocks are picked by the same category 3 screening that we have always used, stocks that we would have alerted as they broke their previous days high, and stocks that still made good returns.

The support range allows for someone to trade with advanced knowledge of the risk or reward of having that position. And makes possible for someone to trade without having to watch a computer screen.

So, some of the stocks are at the buy range for a day or two before they take off, and I have just carried it over. The day it moves it may never hit the buy range. The best option is to wait, and target the positions you both want and that provide the lower risk. You many not be focusing your buying on the movers of the day in that case.

Hope this helps more than just one person, I could see the question coming after CHS took off.

Good Trading!!

Sam
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