FILL THE GAP STOCKS HOW TO

Investors who want to trade gap-down stocks can easily find them by using a stock screener. However, what’s harder to tell is whether the gapping action is short lived or whether it will continue to become a trend. Why Are Gap-Down Stocks Important?Īnytime an investor identifies a stock that is gapping down, it indicates a large volume of sellers. We’ll also review some of the more common trading strategies for gap-down stocks.

FILL THE GAP STOCKS HOW TO

After that, we’ll review the different kinds of gaps and how to identify them. In this article we’ll dissect gap-down stocks by defining what they are and how traders identify them. An effective trading strategy will also require the use of trailing stops that will help the trader exit the trade before key levels of support or resistance are breached (which usually indicates the trend is breaking). Trading the gap requires discipline and an understanding of how to analyze the gap. the gap fills quickly) or could be the beginning of a negative reversal for the stock. Reasons why a stock may gap down include the release of news about the stock, such as an earnings report that missed analysts’ expectations or some sort of geo-political event that may incite speculators to bid down the price of the stock.Ī gap-down stock indicates a trend that may either be short-lived (i.e. Investors can identify gap-down stocks during after-hours and pre-market trading. A signature feature of a gap-down stock is a sharp downward price move with no other trading occurring before or after. Gap-down stocks are stocks that open at a lower level than the previous day’s closing price.

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Fill the gap stocks