[isatrader]

Thankyou for your explanation. Does your resistance line rest on the "HIGH" price for the week on the Candlestick or HLC or on the "close" price. This brings me to my next question regarding where to set my buy order. I understand Weinstein's theory of setting the buy price but how do you decide on the buy price (assuming I am a "trader") if all of us traders draw the resistance line at different price levels. I want to make sure the breakout price I plan to buy a stock at is that price that Weinstein's theory agrees with. I realize this is a very rudimentary question but it seems extremely important so that i select the proper breakout price. Thank you!

The resistance line is drawn on the high of the week.

There are different methods for ascertaining the correct level. One that I find quite clear is the use of point and figure charts, on which you can clearly see the level at which price needs to get above in order to make a continuation breakout. The method doesn't have any hard rules on identifying the precise level, but if you follow the key components like laid out the breakout quality checklist here: http://stageanalysis.net/forum/showthrea...27#pid5227 - such as a minimum of 3x average daily volume on the breakout day, a strongly rising 30 week moving average, price moving to new 50 day highs, strong relative performance and no near term resistance etc. Then you will increase your probabilities.

Weinstein's book focuses heavily on the investor method, as he believes that the long term is much more significant. But if you are interested in the short term, then you can find much more expanded information on the trader method entry points in Mark Minervini's excellent book and also some extra concepts of his own, such as the volatility contraction pattern (VCP). So I'd recommend taking a look at that and William O'Neil's How to Make Money in Stocks book. As they both trade in a similar way to the trader method,except that they are interested in fundamental information as well, which is not part of Weinstein's method, which is 100% technical. But if you don't get bogged down in the fundamental parts of those books, then they can give you additional insights into short term technical trading that are left out of Weinstein's book.