[isatrader]

PEO.V has had a nice base and is now looking to break out over 8.52. Everything looks good but I take it one should never buy a breakout unless volume comes in?  Last few weeks there was no volume. So like with KL I would need to see that the daily volume is well above 200 sma to enter? I am assuming when stocks break out on pitiful volume there is little prospect of them going very far and are more likely to break back down soon after... It would be a shame if it breaks out on little volume as everything else- to my eye- seems really good in terms of setting up.

Thanks.

It not that you should never buy, unless volume comes in on the breakout day and after. But that you should be more cautious if you buy without good volume, as you want to see at least 2 x the average volume come in on the breakout day, or ideally more. And then finish the weekly chart with at least 2x the average weekly volume too. As you want to see strong demand coming into the stock, and ideally the other stocks in the same sector too. As the biggest moves tend happen in stocks where the whole sector is getting volume.

Is PEO.V in a strong or strengthening sector? Are its competitors breaking out too? Is there lots of volume coming into the other stocks in the sector etc.

Stage Analysis is not just about looking for good individual charts, it's about taking a Weight of Evidence approach view to the market, and timing your entries into Stage 2 stocks in sectors where the institutional money is flowing into. As without the volume, the moves tend to much more mediocre. So volume is one key components of the method for this reason.