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 stocks in play for gapping on Wednesday October 21 are
Tupperware (TUP)
Gilead Sciences (GILD)
Drugstore.com (DSCM)
If TUP opens anywhere between 44.01 and 45.30, expect it to go higher
If GILD opens anywhere between 46.12 and 47.50, expect it to go higher before retreating
If DSCM opens anywhere between 2.66 and 2.75, it should go higher
This is a part of our trading strategy and we will win.
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