Yes, there is a sensible way to play a gap - wait.
Unless you have streaming real time quotes and instant execution and ontinually graphing displays of the chart one will always get either burned or lucky playing gaps. My recommendation isto look at the numbers at 9:30, 11, 1:30, and 3. Those aren't just arbitrary times - they are when statistically the larger trades are made (post meeting and lunch for funds, etc.) If the stock has a pattern of humps, like nscp has for the last few days, and it starts oscillating like it did today, then just wait for it to settle down to find out what the lower floor is. If it starts to repeat the arc up, either enter for a scalp or wait for it to return to its lower resistance. If you look at the 5 min chart for the previous days, you should get a fair idea how close to the open it will return to. Caveat is that this only usually works for stocks with over 500k shares trading. If at 3 pm to 3:30 the trades start increasing in number, volume and the ask goes up slightly, enter. If it doesn't do the latter, but you are still bullish on it, enter. If you have any doubt, don't. There will always be other stocks tomorrow...
lastshadow |
