The Pocket Pivot Buy Point
This is the original home of the pocket pivot buy point, a buy point created by Dr. Chris Kacher who created the pocket pivot in 2005 when the sideways choppy markets of 2004-2005 were making base breakouts fail. But what does not kill you makes you stronger, and the pocket pivot concept was born. The pocket pivot concept is, in essence, a favorable buy point in a stock. Buying pocket pivots are to our advantage because they get us into a stock early often before it breaks out of its base. It also enables us to add to a position in a winning stock as such stocks often have multiple pocket pivot points as they move higher.
The basic premise of the Pocket Pivot:
- Institutional Buying creates new-high base breakouts, but we also know that institutional buying occurs within consolidations and during uptrends.
- This buying within consolidations and uptrends in most cases leaves price/volume "footprints".
- The pocket pivot describes that "footprint," and provides a clear, buyable "pivot point," or "pocket pivot buy point."
- Pocket pivots also provide a tool for buying leading stocks as they progress higher within uptrends, extended from a prior base or price consolidation.
The following is a report which was sent to subscribers to our Real-time Reports service on Dec 6 2010. It shows an example of Pocket Pivot buy points in Molycorp(MCP) and Rare Element Resources(REE).
The two rare earth stocks are coming back to life. MCP and REE are both showing strong pocket pivot activity. Both had big run ups prior to correcting. The upside potential is big here but both stocks are highly volatile so we recommend these stocks only for aggressive investors as the downside from the buy point at current levels could be as high as 15%.
MCP has a pair of pockets at the bottom of its base:
REE has one: