Buy flat base breakouts in a bear market ?

Discussion in 'Strategy Development' started by billpritjr, Apr 25, 2004.

  1. I have read mostly "no" to this question, mainly from the O'Neil / Granville / Weinstein / etc, school of thought.

    My question is, in a bear market (which is coming, just a matter of time), if I come across another MAGS or IPIX, should I automatically avoid it or consider it?

    Note:

    MAGS traded 200 times its previous day's volume on B.O. day
    IPIX 88 times

    Both low shares outstanding

    "World Climate" (security/terrorism) provided obvious catalyst

    MAGS returned 300% in a few weeks post BO
    IPIX returned 500% post BO

    Again, if I have the "perfect" chart pattern, volume to confirm it, plus supplemental factors such as world climate / currency / oil prices / severe weather / etc, should I trade it?

    thanks

    :) :)
     
  2. THe dynamics behind MAGS and IPIX generally don't happen in bear markets.