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Strategies & Market Trends : Analysis Class for Beginners

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To: Investor2 who wrote (868)	6/11/1998 8:16:00 PM
From: Les H	Read Replies (1) of 1471

Re: "The safest strategy would be to watch the breakout, and the usual reaction back to the previous line of resistance. If the price holds, the time to buy would be on the low, in this case $30." No one can actually buy on the low. What one can hope to do is to set a threshold of how far an extension above the breakout point in which a buy will be entered - a limit order. Given the expectation at that time was for approximately a 5 point move (from 26 to 31 to 36, each the depth of the base), no more than 1 point or 32 (about 20% of the expected move). As for Kroger's, the best confidence one could develop in the breakout is that its peer stocks: Safeway, Win Dixie, Whole Foods Market, Wild Oats, etc., were either breaking out or had already done so.

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