Cents and Sensibility - Kimberly and Friends' Consortium Message Board

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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium

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To: Grandk who wrote (30930)	11/20/1999 11:24:00 AM
From: stan s.	Read Replies (5) of 108040

Gaps almost always fill. They are created by frenzy and euphoria and that "gap from" point is almost always revisited. It's usually filled in a matter of days or on the next leg down, sometimes it takes a market correction. There are somewhat rare occurrences when the story that creates the gap is so compelling that a stock soars and never looks back. The poster mentioned DITC, it has a gap all the way back at 35... Some quality stocks left gaps earlier in their history and it's doubtful they will ever look back. An example (not a very good one) is MSFT...left a gap around 30 in December of 97. Will it fill? I always look at gaps on both short term and position plays...if a stock gaps and you miss a quick trade you can almost be assured it will fill at some point, often the not too distant future. A lot of people short to fill a gap...meaning that once a gap has occurred and the frenzy subsides, the gap makes a good target to aim for on the downside. Conversely, longs will often wait till the gap fills and watch for a hold at the "gap from" point. That point traditionally offers some support, albeit relatively weak... Stan

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