Trade Like an O'Neil Disciple: How We Made 18,000% in the Stock Market

3.2. CLIMBING ON BOARD THE ROCKET RIDE

If you refer to Figure 3.2 and Figure 3.3 simultaneously, you can follow the buy points in the pattern. On Figure 3.3, we see the initial breakout to new highs that I bought at the cup-with-handle pivot point. The stock then spent the next five weeks or so pulling back to the breakout point and the inching up before it launched again at Buy point #2 on the chart. In hindsight, this was also a test of the 10-week moving average as the weekly chart of Figure 3.1 shows. At the time I didn't see that because I was looking exclusively at daily charts, but to me it looked like a breakout from a miniature cup-with-handle formation and so I considered the stock buyable at that point, and today I now know that in fact the action at Buy point #2 constituted a "pocket pivot" buy point, something we will cover in detail in Chapter 4. CUBE then stair-stepped its way to around 49 (note on the weekly chartFigure 3.1, the prices are split-adjusted 2-for-1, hence are halved) before it pulled back sharply toward its 50-day moving average in late September into early October. I remember my clients calling me, upset that I hadn't sold them out of their CUBE close to the 49 high. But as I saw it, the stock was pulling right back to its 50-day moving average for the first time since it originally broke out in mid-May, and this was a place to add! We had to buy, I told my clients. At this point, I was running low on funds in my account since I was already loaded ...