🚀 Introduction:

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Spot Breakouts Before They Go Mainstream

In today’s fast-moving market, traders are constantly looking for early entry signals that anticipate major uptrends. Enter: Pocket Pivots — a proven breakout patterns featured in the bestselling book Trade Like an O’Neil Disciple by Gil Morales and Chris Kacher.

This post will guide you through:

• ✅ What Pocket Pivots
• ✅ Why they work and how institutions use them
• ✅ How to identify them using volume and price action
• ✅ Chart examples and Pine Script coding (included)
• ✅ Tools to implement this strategy

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📚 Background: From William O’Neil to Morales & Kacher

William O’Neil’s CAN SLIM method introduced a structured way to find growth stocks poised to explode. Gil Morales and Chris Kacher—two of his top disciples at William O’Neil + Co.—refined that strategy to identify early breakout signals, even before the traditional breakout point.

Their innovations, Pocket Pivots and Buyable Gap Ups, help traders:

• Catch breakouts before the crowd joins
• Avoid false breakouts from weak hands
• Recognize institutional accumulation in real time

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What Are Pocket Pivots?

Pocket pivots are special signals on a stock chart. They show when big investors (like hedge funds or mutual funds) are quietly buying shares. Even if the price hasn’t moved a lot yet, the big volume tells us a strong move might come soon.

These setups often happen after a stock has been moving sideways or resting. When volume spikes and the stock moves up, that’s your clue. Traders watch for these signs to get in early—before the big breakout.

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Why Pocket Pivots Matter

They help you catch strong stocks early. It’s like being first in line before a stock makes a big jump. If you wait for a big breakout, it might be too late. Pocket pivots give you a chance to ride the move from the beginning.

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When to Look For a Pocket Pivot

• After a pullback to a key moving average (like the 10-day or 50-day)
• When volume is higher than any of the last 10 down-days
• When the price closes near its high
• On a green (up) day

Example: If a stock averages 1M shares traded per day, a pocket pivot might happen on a day when it trades 1.5M shares and closes up.

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Tools You Need

• Charting software like TradingView ( you get up to $15 as a bonus! Use this link to sign up )
• Volume average indicator
• Moving averages (10-day and 50-day)
• Optional: RSI and MACD for confirmation

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How to Confirm a Pocket Pivot

1. Volume is higher than the biggest down day in the last 10 days
2. Price closes in the top half of the day’s range
3. Bonus: It happens near a moving average like the 10-day line

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When to Stay Away

• The stock is in a downtrend
• The overall market is weak
• There’s no volume surge
• Stock is hitting resistance

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Real-World Example

You see a tech stock resting on its 10-day line. On Monday, it jumps 3% with volume 60% higher than any day last week. That’s a pocket pivot. You buy and use the 10-day line as your stop-loss. The stock moves 20% higher in two weeks.

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Common Mistakes

• Buying without volume confirmation
• Ignoring market trend (bear markets kill setups)
• Getting in too early or too late

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Tips for Better Results

• Keep a checklist before entering a trade
• Use trailing stops to protect profits
• Journal every trade (what worked, what didn’t)
• Don’t chase—wait for the signal

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Summary

Pocket pivots are like a secret handshake from big investors. They tell you, “We’re buying—get ready.” Learning to spot them takes practice, but once you do, you can catch powerful moves before the crowd.

Use smart tools, watch volume, and always stay patient. That’s how you trade like a pro—even if you’re just getting started.

🎯 Early signals. Smart entries. Big wins.

Below is the pine code you can plug it in TradingView.

// This Pine Script® code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © eemani123

//@version=5
indicator("Pocket Pivot Detector", overlay=true)

// Settings
pivotLength = input.int(10, title="Lookback Days")
showSignals = input.bool(true, title="Highlight Pocket Pivots")

// Price and Volume
volumeToday = volume
volSMA = ta.sma(volume, 50)
priceAboveMA10 = close > ta.sma(close, 10)
supportZone = close > ta.sma(close, 50)  // pivot typically happens off support

// Pocket Pivot Volume Criteria
isPocketPivot = volumeToday > volSMA and volumeToday > math.max(volume[1], volume[2], volume[3], volume[4], volume[5], volume[6], volume[7], volume[8], volume[9]) and priceAboveMA10 and supportZone

plotshape(showSignals and isPocketPivot, title="Pocket Pivot", location=location.belowbar, color=color.green, style=shape.labelup, text="PP")