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

5.12. PUTTING IT ALL TOGETHER

As we were careful to point out at the beginning of this chapter, pocket pivot buy points, gap-up buy points, use of the 10-day and 50-day moving averages as sell guides, and the Seven Week Rule are not viewed as separate "tricks," but rather as a holistic group of interrelated techniques that we have found very useful in practice. All of these components come together as concrete means of dealing with positions in big, leading stocks that have outstanding profit potential if handled properly. To illustrate this, let's go through three "trading simulations," for lack of a better term with three subject stocks from the market rally that began in March 2009:

1. Apple, Inc. (AAPL)

2. Cerner Corp. (CERN)

3. Green Mountain Coffee Growers (GMCR)

For readers interested in similar real-time analysis of individual stocks, see the Follow the Stock section on our website: www.virtueofselfishinvesting.com.

5.12.1. Apple, Inc. (AAPL) 2009

Apple, Inc. (AAPL) flashed a pocket pivot buy point on April 16, 2009 (Figure 5.51), nearly a month after the general market logged a follow-through day, signaling a new general market rally phase. On the pocket pivot day volume was the highest in the prior seven days, and was also higher than any down-volume day in the prior 16 days, thus meeting the 10-day minimum required for a proper pocket pivot "volume signature." AAPL began its move on the pocket pivot day reasonably close to the 10-day moving average, which qualified as a buyable ...