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Politics : Formerly About Advanced Micro Devices
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To: dougSF30 who wrote (126458)10/19/2000 1:00:46 AM
From: tejek   of 1579388
 
Doug,

I think you know that the filling of the gap that Monty Bear predicted is a bunch of Bear bull. And you probably know that a gap results from an imbalance of traders....on the way up, more buyers then sellers and on the way down, the reverse.

TA says that a gap has significance only for the trading in the first few weeks after the gap was formed; the significance being that the gap may need to get filled. And the reason for the need is because the traders who jumped on the momentum bandwagon which caused the gap in the first place want to take profits. This, particularly happens, when the momentum stalls and the traders see no further reason to be invested in the stock. Those traders then sell the stock, causing the stock price to move back down to the level just before the gap was formed; hence, the filling of the gap. That did not happen with AMD because its momentum did not stall and it continued to move up.

Most TA experts will acknowledge that once the gap has existed without filling for several months, any subsequent filling has little if any correlation with the original formation of the gap.....the reason being is that those momentum traders are, most likely, long gone.

In the case of AMD, the gap was filled recently (after several months of formation) because market and sector fundamentals are perceived to be weakening, causing investors to vacate the stock at all levels including the level at which the gap was formed.

ted
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