1.Where is the stop gapping to?
2.Where is it gapping up from?
3. Is there some type of shock value to the gap
4. Is the stock gapping just enough to clear significant support resistance or is it gapping excessively so as to ruin the risk-reward?
5. Is this stock gapping into the void or into resistance?
6. Is that gap showing relative strength or relative witness to the market typically make them more potent?
So these questions you need to be asking every single time you look at a gap. Every time you look at it Again, you need to be asking yourself those questions.
The shock value and the relative strength are two of the most important things you need to be asking yourself.
Mike says, ” Is there some type of shock value in the gap showing relative strength room
What this means is for example, if the market were gapping down say it was gapping down 1% and you see a gap like this on OLED over a wide range red bar over a pivot. Oh my gosh, I mean I would need a towel to stop me from drooling. That’s how nice this gap is why?
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