Ross Haber's Newsletter May 30, 2018
Ross Haber's Newsletter May 30, 2018
Ross Haber's Newsletter May 30, 2018
More importantly, a broad base of fundamentally sound, leading growth stocks continues to build constructive bases
and break out, providing the backbone necessary to support a healthy, sustainable uptrend.
So, continue to buy leading stocks as entry areas present themselves. Remember though, “buying right” is critical, as are
tight, yet logical sell stops. Exposure should only be increased if progress is being made, the general market continues
to improve and its leadership continues to make worthwhile progress.
Key Terms: Below are the key terms that are used throughout the newsletter.
1. Big volume move: A volume increase of at least 25-30% as a stock breaks out through a specific entry area.
Exceptions are made in the cases of pocket pivots (including 5-day pocket pivots) and significant increases in volume
that can be clearly seen on a relative basis.
2. Guide for entry: A specific level or price from which a stock can be purchased on constructive weakness.
3. Constructive weakness: This refers to price action that does one of the following:
Pulls back on light &/or declining volume.
May be considered more of a drift lower than a “pullback.”
Moves in a tight, sideways pattern on light &/or declining volume.
Movement below a significant area of support that ultimately reverses and closes back near a stock’s high for the day.
This is referred to as an undercut and rally which forms a bullish reversal.
Trading Guidelines
1. Validating Trades: When a stock breaks above an entry point (i.e. it triggers a breakout), it is absolutely critical to check
the volume on the move in real-time to ensure it is considered a big volume move as defined in key terms.
2. Entering Trades: When initiating a buy on a stock, never purchase the stock higher than 2% above its entry area as
defined.
Exception 1: If the stock is exhibiting overwhelming strength and power through both price and volume in the previous
days/weeks prior to its breakout, it is acceptable to enter the stock as high as 5% past its entry point.
Exception 2: When a stock gaps higher at the open, observe price and volume for the first 30 minutes to determine a
possible entry. If a constructive pullback occurs, a position can be initiated. The stock should not be chased higher and
should be not be purchased more than 2% past its entry point. Please note that entering positions on gap-ups should
be executed only by advanced traders. If you are unsure, it may be best to skip the trade.
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