A modest pullback (roughly −5% to −30% from the high) in an otherwise strong name is the classic 'buy the dip' zone. The data says how modest.
“Buy the dip” only works when the dip is shallow enough to be a pause, not a breakdown. The pullback buy-zone defines it as a name a measured distance below its recent high — deep enough to get a better price, shallow enough that the uptrend is likely intact.
A −8% dip in a leader is a different animal from a −60% collapse. The forward returns by pullback depth show where “dip” quietly becomes “falling knife.” Pair the zone with a trend filter so you’re only buying dips in names that are still above their 200-day.
You are not trying to catch the exact low — that’s a fool’s errand. You’re buying a statistically favourable range and sizing for the case where it keeps falling.