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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Gary105 who wrote (27414)	7/25/2000 12:13:39 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68241

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.