Technical analysis for shorts & longs Message Board

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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 659.03

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Nov 21 4:00 PM EST

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To: Gary105 who wrote (27414)	7/25/2000 12:13:39 AM
From: Johnny Canuck	Read Replies (1) of 68252

Gary, Primer on gaps: hardrightedge.com From experience, gaps do not necessarily have to get filled. It depends on the strength of the move. In general the gaps become levels of support as earlier buyers perceive value and are willing to enter the stock (ie... it was cheap before, so it is cheap now). Short term gaps get filled because people take profits on break outs from near term highs. People are afraid to enter at this point due to the higher valuation, so no support emerges till the gap is filled. Longer term, on average it is statistically hard to maintain good news so eventually a stock pulls back, under extreme pressure, again gaps become areas of support.

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