PPR - Pocket Pivots in Real-Time: FB and MLNX

Published : June 22 2012 at 13:52 ET

Despite the weak general market action with the indexes bouncing on lower volume today and the Dow Jones Transportation Index tgetting hammered, we note that Facebook (FB) is issuing a pocket pivot type of breakout as it emerges from a little cup-with-handle formation on the daily chart. VoSI webinar subscribers may note that we originally discussed FB as a possible buy off the 27 price level using the 1998 historical precedent of then IPO eBay (EBAY) as the basis for buying an initial positon in the stock. One possible cautionary factor here is that a) the 10-day moving average remains well below the stock at 30, and b) the stock was wedging ever-so-slightly over the past three days before issuing this breakout pocket pivot. Mellanox Technologies (MLNX) is trying to push back above its 10-day moving average as it appears to be on track to trade enough volume to exceed the volume of three days ago, the largest downside volume in the past three days. We would remind members, however, that the market is under a little pressure as a result of yesterday's sell-off and the weak volume in today's general market rally. These stocks, however, are stand-outs and should at least remain on one's buy watch list if the general market situation improves, but we think it is important to take note of today's positive action in both stocks.

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