Jump to content



Photo

Gaps


  • Please log in to reply
1 reply to this topic

#1 DIVOT

DIVOT

    Member

  • Traders-Talk User
  • 58 posts

Posted 24 October 2003 - 04:11 PM

Golden Star has had back to back upside gaps this week(GSS).Can anyone give me an idea of what this infers thru TA. Any taget prces or further information would be most appreciated. Thanx also to the helpful people who responded to my prior inquires about finding a broker who handles all the types of trading I wanted execute. Good trading to all. Paul

#2 PIK.

PIK.

    Member

  • TT Member+
  • 837 posts

Posted 25 October 2003 - 06:58 AM

Divot, the 2 gaps MAY be displaying a continuation gap and then a subsequent exhaustion gap. There will be several important technical items to watch within the coming days. First, the gaps should act as support on any pullbacks, if the first gap does not provide support then a test of the second gap should be anticipated. A quick fill of the first gap and failure to hold support is indicative of an exhaustion gap. In addition, look for a gap down. If that happens the chart will be displaying an island reversal pattern which indicates a trend reversal and lower prices. Also, any bearish engulfing candlestick patterns will be a warning sign that the last gap may be an exhaustion gap. Volume on both gaps was strong (well above the 60 EMA volume bar) which are positive signs and obviously the gaps are in the direction of the trend. Another item to note is that GSS (similar to NEM) filled the gap down from late Sept. and broke through this resistance area with conviction. I am unaware of your time frame for your trade, however, from an intermediate term perspective that is a sign of strength and now an important support area along with the most recent gaps. Bottom line, watch how price reacts around the gaps, keeping in mind that the gaps need to act as support for further price advancement. Any of the previous warning signs should raise warning flags for the potential reversal. I hope this helps with your question.
Trade based on what you see happening, not what someone else thinks or hopes will happen.