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Technology Stocks : BEA Systems (BEAS) - Undiscovered Growth Stock -- Ignore unavailable to you. Want to Upgrade?

To: bafi403 who wrote (1641)	3/16/2001 2:33:15 AM
From: Spytrdr	Read Replies (2) \| Respond to of 2477

i would start by changing that attitude if i were you... there is no mathematical formula for gaps. these are all "interesting empirical patterns", nothing more nothing less. this should be the starting point for your own research, not the end of it. did you expect us to write a book here to enlighten you? gaps signal breakouts, up from resistance, or down from support. to understand gaps you have to understand support & resistance first. equis.com stockcharts.com the reason gaps are eventually filled most of the time is that they signal support/resistance lines. what was support once breached becomes resistance (in the BEAS case, that's at around $ 29), and what was resistance once breached becomes support. in the case of a stock going down and breaching support levels, it's going to go search for the next support level, and that is usually the previous breakout area from the base. that is why gaps to fill act as magnets on downtrending stocks. it happens the other way around too, if you check the INSP chart i referenced, you'll see that after GAPPING down and breaking the descending triangle pattern in a few days of panic, the stock proceeded to rise and RETEST/FILL the resistance level/GAP AREA (floor of the triangle), couldn't surpass it and came back down. that's a classic. take a look at figures 9 and 10 on the 1st link mentioned above. so, when you ask if "80% of the time is a personal hunch of mine", that's like you asking me why stocks usually retest support levels instead of any given arbitrary level. if you don't understand the logic behind all this, please let me know. thank you. ___ <<Your response is neither a theory nor a reasonably logical story. But, I guess, it is an interesting empirical pattern. Is "80% of the time" a personal (hunch) estimate? If you do come across a logical reason, please let me know.>>