We sent out an alert on the pocket pivot buy point in RVBD that occurred on Tuesday of this past week, which of course led to some questions about the V-shaped look of the pattern before the stock flashed the pivot point. In our view, and as we have annotated on the chart the "V" shape, which would normally make a pocket pivot more failure-prone, is likely negated by 1) the very strong gap-up breakout on extremely large volume followed by 2) the strong-volume support as the stock pulled back down to the 50-day moving average, forming the bottom of the "V," and the fact that 3) the right side of the "V" did not show any wedginge (successively declining) volume as the stock moved up the right side, which was in fact constructive action. When you throw in 4) the two pocket pivots at the top of the "V" the stock is actually acting very powerfully here. This current breakout represents a continuation pocket pivot buy point.
RVBD Follow-Up - Strong Action Negates the "V"
|Published:||30 Aug 2010 03:46 ET|
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