Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: ftth who wrote (385)	2/27/1998 12:23:00 AM
From: The Perfect Hedge	Respond to of 1720

Dave- thanks.GD

To: ftth who wrote (385)	2/27/1998 1:05:00 AM
From: ftth	Read Replies (2) \| Respond to of 1720

[More fun facts on gaps] Trendlines tend to have greater reliability when they are constructed from gap pivot days. Area gaps within price congestion regions (triangles, rectangles) tend to have little significance since it is the nature of these patterns for trading to be concentrated at the pattern boundaries. If a breakaway gap (from a congestion region) proves to be a false indication of strength, and is covered in several trading days, another gap in the same area can be expected if the reaction to the first gap halts short of the immediately prior intermediate-term low. If the gap take-off point shows high volume, and the landing point shows low volume, it's likely that the the next reaction will carry prices back near the takeoff point, or actually close the gap. If the gap landing point showed high volume, it's less likely that any near-term reaction will cover the gap, as long as demand was strongly supporting the new price level (the gap day candle should show short or no lower shadow, and show some improvement from open to close; also should close in the upper 2/3 of the daily range) These last 2 are important things to look at if you're bottom fishing and any upward progress off the bottom must overcome the clustered trading on either side of a gap which happend during its downward move to its bottom, in order to expect prices to make a significant resistance-free move up. Many times you'll see an upward move off a bottom get stiffeled by resistance at one side or the other of the gap. I've found this to be pretty reliable. dh