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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: iGregor who wrote (3101)	5/22/1998 5:44:00 AM
From: Bwe	Read Replies (1) \| Respond to of 34811

Hello East Pole: When you buy on a pullback, you are attempting to get the risk/reward more in your favor. In his book,Tom recommends getting the risk/reward potential for a stock at 2-1 or greater. This means that after figuring the stock's upside price objective, and comparing the upside to the point at which you would sell the stock, you should have twice the potential for appreciation as you do the number of boxes on the down side. Buying a pullback while the stock is on a buy signal gets you in closer to your stop point. Maybe Jan can post an example for you. High Poles on the other hand are very dangerous formations, and according to Chartcraft, deadly in the late stages of a bull market. Michael Burke believes that high poles lead to sell signals or movements below a previous bottom 80% of the time. Buying a pullback with a stock exhibiting a high pole is taking an undue risk and just not worth the chance. Take care, Bruce