If the stock falls back into the base or falls more than 8% below the pivot (buy) point, you should sell all or at least half the shares you own in that stock. If the stock falls back to the top of its base or pivot point, then you have some scenarios to consider:
1) If the stock pulls back on light volume due to temporary weakness in the general market, you may consider buying the stock at this point.
2) If the stock pulls back on light volume and the general market is strong, you may buy the stock at this point.
3) If the stock pulls back on heavy volume due to weakness in the general market, you should assess the overall market. Many times, when the market experiences just a temporary pullback, healthy stocks can still go higher.
4) If the stock pulls back on heavy volume and the general market is strong, then don’t buy the stock immediately. Wait and see what the stock does over at least the next couple of days.