Pocket Pivot Review - Focus List WB, MOMO, ACIA, TWLO Update 10-10-16

Published : October 10 2016 at 11:03 ET

Both WB and MOMO pulled back last week to their 10-day moving averages on constructive, lower volume which offered an entry point. Today, they are looking to trade enough volume for a pocket pivot.

MOMO is up over 6% so is a bit extended from where it could have been bought, though relative to its overall pattern, it is still within its base.

WB is up almost 6% and extended just as its pocket pivot on October 4 was extended, but then pulled back into a buyable zone near its 10-day line. 

Both ACIA and TWLO are unable to hold their 50-day lines. Both have had huge moves as they have been the price leaders so have become fairly obvious to the market. Both have announced secondary offerings. Such offerings can sometimes act as a temporary headwind to a stock as such stocks can sell off on the news, and then again when the offering price is announced. That said, when a leading stock gaps lower on the news, it can sometimes be an entry point, though of course it is always contextual to the price/volume action leading up to that point. And in some cases, stocks can actually gap higher on the news. So it is important not to create any hard and fast rules when it comes to secondaries. Maintaining an open, fluid approach is key. 


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