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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank
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To: Leland Charon who wrote (10019)6/5/1998 7:41:00 AM
From: LastShadow  Read Replies (1) of 120523
 
Gap Strategy

When a stock gaps at open, that is, gaps from the close of the previous day, not just the high, you do this: Wait until about 10:45 and then note the high and low during the morning period. Set a buy stop at the high, and a short stop at the low (allthough I don't recommend shorting if you aren't very familiar with it). Then check at noon to see what happened. Paper trade this on some stocks that you know gapped.

The Modified method sets the entry at 75% of the range between the morning average and the high - but this is best for heavily traded stocks.

lastshadow
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