2 minute and 1 minute are really worthless in the early morning for stocks that have gapped up that much. I would either give it up altogether or wait out the 3 (10 minute) bars. The only time I'd use 3 5-minute are on stocks like say VIAN, CMRC, FFIV, ELNT ADIC, TSCN, PDYN, PUMA, CAMP,IONA,TENF ) because they are not the focus of every trader out there who is 'banking' on everyone making a mad dash for a stock like GNET but hasn't even heard of PDYN or MMPT.
Eventually IONA became too 'hot' to play that easily because other traders joined in (a la PHCM). But until your trades are the focus of all daytraders I'd feel safe entering in the first 10-15 minutes. This is compounded if the stock has not gapped up, then I would feel even safer. It has taken out yesterdays high but not gapped you don't have to worry about a gap filling after you have bought.
I would get in possibly after 15 minutes or 10 minutes on stocks that have not gapped up more than 1% and they are heading up nicely.
High profile internet stocks like GNET, YHOO etc.. I wait for the gap up ---->sell off for about 3 10-minute bars. I have looked at over 200 of my charts from the newsletters, trades (which I actually screen capture for my own edification), and what many nets have in common is an early morning gapdown leading to a late day rally, or vice versa. The stock is saying "I've had enough selling, I am exhausted, I want to join a last hour rally".
For earnings plays, play that scenario and fast forward and fast reverse. Even FFIV which I did enter after 15 minutes is now too 'hot' to continue on that vein.
Gap ups, gap downs you gotta love em and hate 'em but you can't ignore them as profitable money makers. I've read the 'common text book' theories about 'shorting a gap up' etc. which are in most cases ridiculous because the hottest stocks usually go into a runaway gap that continues until the last hour and more likely through the next day or two. You can never get 'enough' of a upward move on these high earners and/or internet 'surprises'. You short them and your're left wondering what the guy in the textbook meant.
You wait for the first 'rush to get into strength' to be over and get in, you don't short unless 2 points on a 65 dollar stock is enough if you're lucky. You buy, especially stocks like NSOL, GNET, even FFIV because they were not overbought (in the broad sense of the internet sector). They were poised nicely. BVSN was 'overbought' so what?
JDSU, SDLI all overbought but they keep going. I had CAMP and PUMA documented as rising 400% in just weeks. Why? Because the first positive earnings quarter was expected. It's all facts in the MG book. Chart patterns that were with slight 'bull' pennants or 'coiled' at the end like the handle of a cup & handle chart formation, or in the lower band of a regression channel all exploded once they triggered (BOBJ, MSTR, NOVL, BVSN, KIDE, IBIS, ) etc. Once you have a 'set up' like a pullback with these stocks, you wait for an indication of contination of former upward trend, for going sky high.
Fundamental strength, a good story, a strong earnings surprise on a stock that has pulled back can rise and rise.. That's why the reversals have to be solidly prepared for and they should 'last' more than 1 hour for a scalp. So yes, I think GNET will last and last, but that doesn't mean I have to get in with the masses that buy at the open. What it means is that I'll wait for the 'buy at the high' crowd to be done, but that's where I diverge from the 'traders'. I would not short, not until the spike is so high that it looks like a maypole with those strings hanging out of them.
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