Education : Gilmo Glossary
| Accumulation | Institutional, as opposed to individual investor, buying of a stock or the market in general. |
| Ants | When a stock is up at least 12 days in a 15 day period, it "shows ants." This is a sign of exceptional upside power and strength, auguring well for the stock. Once a stock logs a series of ants and then stages a pullback, the pullback is monitored for a subsequent move higher through its consolidation area, which is normally small. |
| Base | A period of consolidation, or sideways price movement, following a price trend, be it an uptrend or downtrend. The consolidation forms as buyers and sellers are roughly equal. Its purpose is to "digest" the prior price trend so that buyers and sellers become more closely aligned. |
| Correction | A pullback of about 8%-12% in a trend, most often over a period of several weeks. |
| Cup With Handle | A basing pattern that resembles a cup when viewed from the side. The majority of cwh patterns last from 12 to 26 weeks. The typical correction in price from peak to trough is from 15% to 33%. The handle area should ideally be between 1 and 2 weeks in length and should not be more than 10%-15% deep. |
| Distribution | Institutional, as opposed to individual investor, selling of a stock or the market in general. |
| Flat Base | A base in which a stock's price moves sideways for a minimum of 5-6 weeks and corrects between 10%-15% from its high. A stock that forms a flat base subsequent to a strong prior uptrend has the best chance of continuing higher after breaking out of the base. |
| Follow-Through Day | A concept popularized by Bill O'Neil whereby the odds of a new uptrend in the market sustaining are increased when, on the 4th through 10th days of rally off of a low, at least one major stock average advances by 1% or more on volume that exceeds that of the prior day. The best FTDs occur on the 4th through 7th days of a new advance. |
| Ledge | An abbreviated basing, or consolidation, pattern. A genuine base normally has a duration of at least five or six weeks. A ledge may be as brief as a week or two. |
| MLDR | Massive liquidity-driven rally. |
| Monkey Breakout | A pivot-point breakout that occurs as a stock clears a base to new price highs. |
| PODs | Punchbowl of Death. A large, wide, late-stage bowl type of pattern that forms in a big leader that has had a prior massive upside price move. Following the big price rise, the stock then breaks down and corrects sharply, creating the left side of the "punchbowl." The rally up the right side of the punchbowl appears to be the formation of a typical saucer- or cup-shaped base. However, such a long climb out of such a deep correction often leaves a stock exhausted once it reaches its old high, which corresponds to the top of the right side of the punchbowl. Often, it will then break down completely and stay depressed for an extended period. |
| Pivot Point | The point on a price chart at which price has the highest probability of moving higher; the point of least resistance. Often this corresponds to the high of a base. |
| Pocket Pivot | An early buy point in relation to a stock's basing pattern. Typically, in intermediate-term investing, a pivot is located near the top of a stock's base. |
| Reaction | An abbreviated correction in a trend, normally as little as 3% and as much as 5%.. |
| Relative Strength | The concept of measuring the price performance of one security vs. another over a period of time, usually a stock vs. an index. A relative strength line can be plotted on a chart to easily show the investor the relationship between the two securities. |
| Resistance | A price area on a chart that tends to act as a ceiling of resistance by making it more difficult for price to rise. |
| Support | A price area on a chart that tends to act as a floor of support by making it more difficult for price to fall. |
| Walking The Plank | A stock that experiences a very sharp drop of, say, 20% or more, due to a gap lower (often earnings related), will often attempt to recover by moving sideways in a range. This is akin to "walking the plank" before the ultimate fall. At first, the sideways range, or plank, appears to be a stabilization of price. Many times, however, this walking of the plank merely postpones the inevitable, a renewed selloff that accelerates as investors realize price recovery will not occur anytime soon, and throw in the towel. |