Frequently Asked Questions

Pocket Pivot Review / Buyable Gap Ups
RVBD had a follow on pocket pivot on 9/28/2010. I bought it that day. What is the best stop loss for this position i.e. 10dma, 50dma or some other numbers?
Since you bought a follow on pocket pivot, ie, a pocket that is extended above the base, you will probably want to use a violation of the 10dma as your sell guide if this was your starting position. And remember, you also must always sell, no questions asked, if the loss exceeds your maximum permissible loss level, which, for most investors is 7-8%. That said, a 10dma violation would probably occur before the 7-8% maximum is hit. (A violation of a moving average occurs when the stock closes below the moving average then, in subsequent days, trades below that low during the trading day.)

Published: Sep 30 2010