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Byline: Jonah Keri
Buying a stock at the right time gives you the best shot at a big gain. It also can give you peace of mind.
What's the right time to buy? Wait for a stock to stage a healthy run-up, then fall into a smooth base. Watch for it to approach a new high, then settle back on light trade. When it crosses the top of its handle on heavy trade, buy.
Snaring a stock at its breakout steers you clear of grumpy sellers. With resistance gone, it can make a big run. But if it cracks, your shrewd buy gives you a buffer against a sudden, nasty drop.
Power management chipmaker Microsemi sank into a deep base in February. By early May, the stock had moved close to its old high. It carved a healthy, downward-sloping handle on light trade, a bullish sign.
On May 16, the stock zoomed out of its base on brisk volume. You'd have fared best buying Microsemi right at its pivot point of 48.13.
The stock roared to a new high of 66.33 on June 7. If you'd bought right, you would have nabbed a 38% gain in three weeks.