Page 302 - THE MARKET WHISPERER

298 PART 10 - Winning Trades

Prior to breakout, we need to plan our target price. We estimate this in
cents, and not in percentages: in other words, how many cents will the price
rise after breakout? Estimating the target is based on integrating market
direction and market force, the stock’s force on the breakout day, and the
stock’s history of breakouts. Its history refers to its intraday behavior over
the past two or three days.

It is reasonable to assume that if we look back, we will see that this is
not the only breakout over the past few days. By how many points did it
jump in the previous breakouts: 20 to 40 cents, or perhaps 50 to 70? Every
stock has its own unique “‘personality,” and you need to get to know your
stocks “personally.” For some, an amazing breakout is just a few cents, and
therefore will not tend to interest us. Others breakout often with a range
of tens of cents.

What is the Stock Volume?

Low volume is dangerous since it becomes more difficult for us to realize
quick profits. By contrast, stocks that trade millions of shares per day, such
as Citigroup (C), will tend to have more trouble moving and breaking out.
We will therefore look for breakouts in volumes of more than one million
shares per day, but be less interested in those stocks that trade many
millions of shares per day.

The Personality of the Citigroup Stock, (NYSE: C)