Volatile stock so be safe..
Gaps can be a source of S&R depending on if price is under a gap or over a gap, and on what type of gap it is..
Area gaps, also known as common gaps, usually close in a few days. These often occur in congestion zones.
Continuation or Runaway gaps usually occur about mid way in a trend and some use them to mark the half way point. These can stay open several weeks. I have found that not all gaps close which is not what I originally thought when I started trading. Sometimes these can provide support or resistance.
Breakaway gaps often start a new trend and can often be found leaving a congestion zone and can signal a new trend. These usually occur on high volume and the higher volume may persist for several days. These stay open, or do not fill, for the longest period of time compared to the other gaps and it is not true that gaps always fill. These can sometimes be a source of S or R.
Ex Dividend gaps are caused by dividend distribution. There are folks who buy a stock for the primarily for the dividend, then sell the next day so the gap closes quickly. I am not a partaker of this practice, but hey..whatever floats your boat (o: These gaps do not usually provide a source of support of resistance as a rule. Usually closes by the end of the trading day.
Exhaustion gaps occur at the end of a trend and can be likened to a final gasp for air. The trend is tired at this point and I guess it just wants to lay down and rest..lol...This type of gap is not usually not followed by extraordinary highs (or lows depending on direction of trend) and can be quite wide. Exhaustion gaps can occur after a continuation gap and usually close in a week. These gaps do not provide a source of support of resistance.
Not a RECOMMENDATION
Someone on here wrote Buy Red and Sell Green..it stuck with me (o:
Gaps can be a source of S&R depending on if price is under a gap or over a gap, and on what type of gap it is..
Area gaps, also known as common gaps, usually close in a few days. These often occur in congestion zones.
Continuation or Runaway gaps usually occur about mid way in a trend and some use them to mark the half way point. These can stay open several weeks. I have found that not all gaps close which is not what I originally thought when I started trading. Sometimes these can provide support or resistance.
Breakaway gaps often start a new trend and can often be found leaving a congestion zone and can signal a new trend. These usually occur on high volume and the higher volume may persist for several days. These stay open, or do not fill, for the longest period of time compared to the other gaps and it is not true that gaps always fill. These can sometimes be a source of S or R.
Ex Dividend gaps are caused by dividend distribution. There are folks who buy a stock for the primarily for the dividend, then sell the next day so the gap closes quickly. I am not a partaker of this practice, but hey..whatever floats your boat (o: These gaps do not usually provide a source of support of resistance as a rule. Usually closes by the end of the trading day.
Exhaustion gaps occur at the end of a trend and can be likened to a final gasp for air. The trend is tired at this point and I guess it just wants to lay down and rest..lol...This type of gap is not usually not followed by extraordinary highs (or lows depending on direction of trend) and can be quite wide. Exhaustion gaps can occur after a continuation gap and usually close in a week. These gaps do not provide a source of support of resistance.
Not a RECOMMENDATION
Someone on here wrote Buy Red and Sell Green..it stuck with me (o:
I looked at the bottom of the exhaustion gap and it was broken by a small red candle so the bottom of that gap was not strong support. Of course PTON is back up over gap today.
This market seems like it is on steroids....I'm not sure what keeps this machine running..It is almost like this market does not even stop for an oil change, or a recharge as of late..Be safe