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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Casaubon who wrote (40447)	10/16/2002 11:42:39 AM
From: zonder	Read Replies (1) \| Respond to of 52237

Would you not agree that an unexpected news could positively or negatively affect a company's business and this would immediately change the long term expectations for a company, and so its price would jump (or sink)? This is not an emotional situation, in my opinion. Most business growth occurs steadily over large periods of time. Thus gappy price action, in the short term, is a manifestation of emotional trading A business does not have to grow for a company's share price to react to good or bad news related to a company at a point in time. When Martha Stewart's problems were made public, her company's stock suffered. Now that I look at it, there are quite a few gaps that are not filled in MSO chart, by the way. For example, if W. Bush announces tomorrow that there will be no war and the stock market shoots up with a gap, why should it come back down (unless he changes his mind)? The market will be reacting to the fundamental good news (uncertainty disappeared, as well as the USD 1 bn per day war bill, etc). Come to think of it, I think your statement could be applied to rumours that subsequently turn out to be false.