Priceline.com (PCLN) flashed a pocket pivot buy point today as it came up off of its 10-day moving average on volume that qualifies as a pocket pivot volume signature, e.g., volume that is higher than any down-volume day in the pattern over the prior ten trading days. In the daily chart below we can see that PCLN has also pierced and closed above the 300 price level. Jesse Livermore had a rule that when a stock crossed 100, 200, or 300, for example, big round numbers, it should move up rapidly in price once it clears that level. Livermore would likely use the 300 price level as his downside guide for a stop since according to his rule PCLN should move above the 300 level and continue higher, and any violation of the 300 price level would be a reason to exit the stock. It is also possible to simply use a violation of the 10-day line as your selling guide, although Livermore's approach might be more expedient! This sort of pocket pivot is a continuation buy point.
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