CC, the gap up in KCS was quite a surprise this morning, if not for both of us, certainly for me. I still think KCS has a better change of pulling back on any rally in the next day or two but, I'm not willing to risk hanging around just to prove a point.
One of the strategies I use in playing gaps is that I wait 30 minutes to see if price continues to move higher or pull back after the first 30 minutes, then I make a determination on how to play it. I was fortunate that KCS did not add on to its gains and allowed me an opportunity to get out at my stop price.
That being said, I will keep the trade open for the next couple of days for an opportunity to short it again if it can set a lower low from 2 trading sessions ago. If it happens fine, if not fine. I don't mind taking a small beating as long as I can keep on ticking.
On the other side of the coin, if KCS can close above the 20 day moving average, it should be in position to set a new high.
stockcharts.com[h,a]daclyiay[d20041217,20050317][pb50!b20!f][vc60][iut!Lah10,30,5!Lc20]&pref=G
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