Great Stocks Can Stage Pullbacks.(A)(INVESTOR'S CORNER)

Byline: CHRISTINA WISE

Take a breakout, add a whipsaw market and what do you get? A slew of leading stocks dipping back to their pivot points.

So what do you do if your stock takes this route? In most cases, hang on for the ride.

Indeed, seeing a good stock roar 10%, 15% above the pivot, then come down quickly can suck away your confidence. Yet even among high-quality stocks, many do pull back close to or slightly below their breakout points, only to jump higher a few days later.

Why does this happen? Perhaps they didn't put in quite enough time on their handle to shake out the last of the uncommitted holders eager to sell. Maybe the general market, despite being in an uptrend, suffers a hiccup.

Whatever the reason, follow your rules. Get a stock as close to the pivot as possible. Sell only if it falls 7%-8% below your purchase point. If the stock pulls back and you're down 3%, 4% or even 5%, be patient. If it's truly a good stock, it will bear fruit.

L-3 Communications cleared a 15-week base on Jan. 18 in mediocre trade. The next day, it fell 1.67 points to 91.88, or 1% below its pivot point of 92.73. But volume shrank. Over the next seven sessions, it cruised 12% to a new high. L-3 has since ...