..., if that doesn't happen, would you agree that the proposition that gaps must be filled is incorrect?
Hi Paul, (i knew you wouldn't be able to resist)
...but without deteriorating into a discussion of belief systems, grant
me that gaps do fill. perhaps frequently, perhaps only on
occasion. but they do fill. that being the case,
"backing and filling" is a "tool" of technical analysis
that cannot be entirely dismissed.
so let me take the idea further, buy saying that this gap-up we've
experience recently may be filled, and with a proper feel for its
timing, those of us who are long on Dell, can prosper along with
those who may be short the stock. this is not sacrilegious.
to wit:
we may fill the 113-119 gap-up created Thursday, sometime in mid to late
March after the stock has split. if, as Patrick suggests, we split
at around 140, the stock then of course trades at 70, and the
gap range becomes 56 1/2 to 59 1/2. buying opportunity plain
and simple.
for the more adventurous longs this scenario might bring the May 60 Puts
into play (since the dip could well take place after March expiration). dump the puts when you feel the gap has filled well
enough, and buy back shares perhaps, in anticipation of another summer run.
i realize that you more than likely find this another misguided foray
into the bizarre and the unproven.
...but any tool is how you use it.
wouldn't you agree ? |
