Don't Buy Before Market Gives The Signal.(A)(INVESTOR'S CORNER)

Byline: Jonah Keri

It's tempting, sure. Weeks and months go by in a bear market. Finding a solid breakout becomes as tough as spotting a beach in Kansas. When you finally get a good-looking move, it can be tough to let it fly by.

Yet sometimes that's exactly what you have to do -- for two reasons.

First, in a market with clear direction, at least two out of every three stocks will follow the major indexes' lead. Try to nab a breakout before bear season ends, and even the best stock could hit a brick wall.

Second, bear markets don't always have a quick, happy ending. Scores of stocks have broken out only to roll over or return to their bases when the market doesn't follow through

Don't tempt fate. After the market follows through, you'll find plenty of great stocks exploding out of sound bases. Stocks that broke out before the follow-through -- when at least one major index rises 2% or more on higher volume, four to seven days into a new rally -- will often pull back. This gives you a fresh entry point when the market finally takes off. Better to wait.

Fiber-optic cable and components maker Corning offered a compelling case study in 1999. In February of that year, the stock cleared a seven-week flat range, part of a longer 19-month base (not shown in chart).