Pocket Pivot: 11,582 Signals Tested Against the Same Days Without the Volume
A pocket pivot is an up day inside a base or uptrend whose volume is larger than the volume of any down day in the previous ten sessions, read as a sign that buyers are stepping in before a breakout. Gil Morales and Chris Kacher set it out in their book Trade Like an O'Neil Disciple.
A pocket pivot is an up day whose trading volume is larger than the volume of every down day in the ten sessions before it, occurring while the stock sits in a base or a steady uptrend. It is meant as an early buy point, a sign of buying before the stock breaks out. This page states the published idea, turns it into a rule of our own, and tests 11,582 signals in 52 US stocks against a fair comparison.
How it forms
A stock rests in a base or a gentle uptrend. Price moves sideways or drifts up near its short averages, with ordinary up and down days.
Down days set the bar. Over the last ten sessions, some days closed lower than the day before. The heaviest of those down days is the number to beat.
An up day beats it. The stock closes higher on more shares than any of those down days traded. The reading is that buyers are now more urgent than the sellers were, while the price is still inside the base rather than above it. A breakout to new highs may follow later; the pocket pivot is meant to come first.
Volume is the whole signal. The volume page covers what a day’s share count can and cannot say about who is trading.
Where the rule comes from
Gil Morales and Chris Kacher. The two describe the pocket pivot in Trade Like an O’Neil Disciple (Wiley, August 2010). The publisher’s page describes them as former portfolio managers at William O’Neil + Company, the firm behind CAN SLIM, and the book’s contents include a section defining the pocket pivot buy point.
The core test is the volume comparison against the heaviest down day of the prior ten sessions. The authors add judgment about the chart it appears on: their published rules say the stock should act constructively around its 10-day moving average and should not be bought under a critical average such as the 50-day.
Our rule turns that judgment into numbers. A session counts when:
- it closes above the prior close;
- its volume is above the largest volume of any down session in the previous 10 sessions (at least one of which must be a down session);
- it closes above the 50-session simple average of closes; and
- its low is no more than 1% above the 10-session simple average of closes.
The comparison group. Sessions that pass every condition except the volume test. If the volume adds information, pocket pivots should do better than those days, not merely better than an average day.
A worked example
Coca-Cola, Tuesday 12 May 2026. KO closed at $80.03, up from $78.66, on 19,883,100 shares.
The ten sessions before it ran from 28 April to 11 May and held five down days: 30 April on 15,142,200 shares, 1 May on 12,610,400, 4 May on 12,672,400, 7 May on 16,531,400 and 8 May on 12,447,200. The heaviest was 7 May, and 19,883,100 beats 16,531,400 by 3,351,700 shares.
The averages. The 50-session average close was about $76.92, below the $80.03 close. The 10-session average was $78.765, and the day’s low of $78.28 sat below it, inside the 1% limit.
What followed. Ten sessions later, on 27 May, KO closed at $81.62, 1.99% higher. Twenty sessions later, on 10 June, it closed at $83.59, 4.45% above the signal day, while SPY lost 1.73% over the same 20 sessions.
The original data
The sample. 52 US stocks from January 2000, or listing, to 25 September 2026: 329,828 stock-days with 60 sessions of history. The rule fired 11,582 times, 3.5% of them, about 8.8 times per stock per year. The control group, the same setup without the volume, had 55,189 sessions. Every signal is in the pocket pivots file.
Pocket pivots did slightly worse than the control group. After 20 sessions, 6,265 of 11,553 were higher, 54.2%, against 55.5% for the control group (p = 0.008) and 56.2% for all stock-days. After 60 sessions, 6,539 of 11,513 were higher, 56.8%, against 58.6% for the control group (p < 0.001) and 59.2% for all stock-days. The median 60-session gain was 1.97%, against 2.39% and 2.91%.
Against the market it was a tie. 5,942 of 11,513 pocket pivots beat SPY over 60 sessions, 51.6%, against 52.0% for the control group (p = 0.40). After 10 sessions, 53.9% were higher against 53.8% (p = 0.91). On no horizon we tested did the volume test improve the result.
Both halves of the period agree. From 2000 to 2012, 55.5% of pocket pivots were higher after 60 sessions against 56.1% for the control group. From 2013 to 2026 it was 58.0% against 60.6%.
The expiration-day problem
Some heavy days have nothing to do with the stock. On the third Friday of March, June, September and December, index options and futures expire and index funds rebalance, and share volume jumps across the whole market. The options expiry page covers that calendar.
Those days were over-represented. 612 of the 11,582 pocket pivots, 5.3%, fell on a quarterly expiration session, against 5,251 of 329,828 stock-days, 1.6%. Taking them out left the result where it was: 56.9% higher after 60 sessions against 58.6% for the control group.
18 September 2026 is an example. On that expiration Friday, seven stocks on the list printed a pocket pivot, including NVIDIA, Micron, Exxon Mobil and Coca-Cola. SPY itself traded 65,395,100 shares against a 50-session average of 43,386,774.
When it fails
The breakout never comes. Meta closed at $635.26 on 27 May 2026, up from $612.34, on 23,143,600 shares against a heaviest prior down day of 13,772,400. Ten sessions later it closed at $570.98, down 10.12%, and twenty sessions later at $542.87, down 14.54%.
The volume belonged to someone else. An index rebalance, an options expiration or a block trade can lift the day’s share count without any new demand for the stock.
Our numbers are not the book’s rule. Morales and Kacher leave room for judgment about the chart, and a trader applying that judgment may filter out signals our rule keeps. What this test shows is that the volume comparison, on its own, did not separate better days from the same days without it.
Survivors only. All 52 stocks are listed today. That lifts every group’s returns, which is why the comparison between groups matters more than any single number.
Related
CAN SLIM is the William O’Neil method the pocket pivot was designed to fit, and that page covers its buy points. The volume page covers what a share count can tell you. And the breakout page covers the move to new highs that a pocket pivot is meant to anticipate.
When I see a volume signal, I check the calendar before the chart. A heavy day on an expiration or index rebalance Friday tells me about the index funds, not about who wants the stock.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.