PPR - GLD Flashes a Bottom-Fishing Pocket Pivot, TIBX barely clears Pocket Pivot Volume Signature

Published : May 21 2011 at 10:44 ET

While it did not become clear until well after the close given conflicting data sources with respect to the trading volume of the SPDR Gold Trust (GLD) on Friday, it appears that the ETF did in fact flash a "bottom-fishing" type of pocket pivot buy signal. While this doesn't have to lead to an immediate upside move, it does show that gold (and by inference perhaps silver as well) is making a strong attempt at forming a bottom here. Given its recent ability to hold the 50-day moving average which has served as a useful selling guide for gold during its rally in recent years gold is also in a relatively lower-risk area to begin accumulating the yellow metal, using the 50-day moving average as a selling guide.

We also note that Tibco Software (TIBX) also just barely cleared enough volume by the close to qualify as a pocket pivot buy point within this sideways consolidation it has been in for about the past four weeks. Another notable pocket pivot occurred on Thursday in Fortinet, Inc. (FTNT), which then pulled back slightly on Friday, remaining in a buyable position. This is constructive action in these two stocks, which might provide reasonable long candidates if the market is able to find its footing and move higher. Both FTNT and TIBX tend to find support along their 50-day moving averages, which would be your ultimate downside selling guide in each case, although one should always adhered to the 6-7% downside stop-loss rule we generally employ.

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