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Market Lab Report - Weekend Review of Pocket Pivot Reports for the Week Ended November 25, 2016

Published : November 27 2016 at 13:53 ET

Notes from Gil and Dr. K regarding Pocket Pivot Reports sent out over the past week:

Lumentum Holdings (LITE)

GM - LITE had a nice roundabout type of pocket pivot as it regained its 50-day moving average last week. Since then it has consolidated the move off the lows of this current base in constructive fashion, holding tight along the 50-day line as volume declines. This puts it in a buyable position here using the 50-day line as a selling guide.

Dr. K - When moving averages come together, that is often a bullish sign. In this case, it's the 10, 20, and 50-day lines which also serve as strong support.

 

Myovant Sciences (MYOV)

GM - We first alerted members to MYOV on Monday as it was attempting to clear its 10-day moving average on a pocket pivot volume signature. The stock fell just short of the 10-day line by the close, but on Wednesday made another attempt at clearing the 10-day line. That was successful as the stock posted a stronger-volume pocket pivot, and we issued a second pocket pivot report on the stock. This led to a  very strong low-base range breakout on Friday as the stock streaked +19.65% higher. Not bad for a day's work!

Dr. K - The +19.65% gain on Friday gives many reasons to take profits or keep stops very tight. That said, in a strong market environment, IPO U-turn patterns can work. This implies MYOV could reach new highs around 16 and beyond. One could take profits should MYOV start to retrace its gains. 

 

Qualcomm (QCOM)

GM - QCOM is a little unusual in that it has not had a standard 10-day pocket pivot, but instead has had a pair of five-day pocket pivots, the first one as it came up and off of the 50-day line and the second as it came up through the 10-day line. Within the context of a tight base formation this looks actionable here using the 50-day line as your selling guide.

Dr. K - The 10- and 20-day moving averages have come together serving as the first line of support. The 50-day line serves as the last line of support. 

 

Talend S.A. (TLND)

GM - TLND posted a pocket pivot last week after earnings, which became extended right away, and so one would be looking for a low-volume pullback to the 50-day line as a potential lower-risk entry point. TLND, however, was unable to hold the 50-day line, which is not constructive, and we would need to see this quickly regain the line if it is to remain viable.

Dr. K - The 10, 20, and 50-day moving averages now serve as resistance. TLND would have to regain these lines for it to remain on our Focus List. 

 

The Trade Desk (TTD)

GM - Alert members might notice that TTD actually had a pocket pivot coming up through its 20-day moving average ten days ago on the chart just under the 26 price level. This was followed by a low-volume pullback to the 20-day line, resulting in another strong-volume pocket pivot as the stock attempts to break out from a double-bottom base. So far the stock is holding along the mid-point of the "W" that forms the double-bottom pattern, which would be considered the actual base breakout buy point. With the stock holding right at the buy point, this is actionable here, using the 10-day or 20-day lines as your selling guides.

Dr. K - TTD is a more standard type breakout where your stop would be further than buying on constructive weakness. Such breakouts have not worked very well over the past couple of years, but the character of the market has changed since the elections. The fundamentals behind this IPO stock allowed it to shoot 66% above its IPO price when it went public. Its price/volume is also sound. Its 10- and 20-day lines should catch up with the price should TTD stall, thus one's exit point would be less than 6-7%.

 

Weibo (WB)

GM - WB is a name we first reported on way back on April 6th of this year when the stock was trading just under and around the $20 price level. Since then the stock has gotten as high as 55 and change before pulling back more substantially and attempting to build a new base. The stock may be trying to round out the lows of a potential new base here as its posted two consecutive high-volume pocket pivots on Tuesday and Wednesday of this week. While Friday's close just below the 50-day line might look troublesome, the fact is that on the weekly chart WB closed the week just above its 10-week moving average, which is constructive. The stock is buyable here using the 10-day or 20-day lines as your selling guides.

Dr. K - One recent mention of WB was on Nov 22 after it reported earnings. Volume was looking strong, thus we sent out a pocket pivot report when it was trading around 47.3 and looked as if it would achieve the necessary volume for a pocket pivot. Friday's action can be considered normal backing-and-filling in context with its prior strong up day on Nov 22 when it rose +7.3%. 


This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2017 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.