Each day, dozens of stocks gap up or down as a result of some preceding event. Gapping stocks create buying opportunities when there is either insufficient buying pressure to sustain the move up in price (gap-up) or a market realization that the stock has fallen to a periodic unprecedented low point (gap-down). The market’s reaction to these phenomena can be transformed into money-making opportunities using the Six Sigma methodology.
According to the current literature, there are four basic types of gaps: A full gap up occurs when the opening price is greater than yesterday's high price. A full gap down occurs when the opening price is less than yesterday's low. A partial gap up occurs when today's opening price is higher than yesterday's close, but not higher than yesterday's high. A partial gap down occurs when the opening price is below yesterday's close, but not below yesterday's low.
The Friday’s list of stocks to watch are:
Western Digital (WDC)
Net Scout Systems Inc (NTCT)
If WDC opens between $37.11 and $38.41, I will buy
If NTCT opens between $13.66 and $14.20, I will buy
Please check the previous post on Wednesday we did it with TUP and on Thursday with LZ. Happy trading
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