5 replies to this topic

[Rogerdodger]

Remember the last time everybody was short and we got a nearly 300 point DOW move up?
Here is one way to trade it.

Here's Pristine's 30 Minute gap rule mentioned above: PDF LINK

"When a stock gaps up excessively, it is usually the seller who is the smart one. This is why many stocks that gap up tend to pull back rather sharply after the first 10 to 20 minutes of trading. Once the
abundant pre-market buy orders have all been satisfied, the demand is gone, and the stock
tends to give way to "professional" selling.
But there is an exception, and it is this exception
that sets the stage for one of our most powerful trading tactics. Our studies have shown that if
a stock that has gapped up is able to trade to a new daily high after 30 minutes of trading, the
strength demonstrated at the open was not artificial, but real. The strength in this case is real
because it's being confirmed by continued buying after the early a.m. rush (the first 20 minutes
or so of trading). This one simple discovery encouraged us to design a simple yet powerful
way for the Pristine Trader to capitalize on the stocks that are truly strong. It's called Pristine's
30-Minute Gap Buy Rule. Here's how it works.
The Set-up
The stock must gap up at the open by 1/2 or more. In most cases, a gap up much greater than
$1 will be news related (positive earnings, brokerage upgrade, etc.), which is fine. It is best if
the stock gaps open above the previous day's high.
The Strategy
Once the stock has gapped open, the trader must let it trade for a full 30 minutes. No action
other than watching the stock is required during this time. Often the trader will be watching and
monitoring several stocks that have met the above set-up criteria.
After 30 minutes, the trader sets an alert 1/16 above the high of the day, which in many cases
will not be too far away from the current price."

[skyymaster]

Remember the last time everybody was short and we got a nearly 300 point DOW move up?
Here is one way to trade it.

Here's Pristine's 30 Minute gap rule mentioned above: PDF LINK

"When a stock gaps up excessively, it is usually the seller who is the smart one. This is why many stocks that gap up tend to pull back rather sharply after the first 10 to 20 minutes of trading. Once the
abundant pre-market buy orders have all been satisfied, the demand is gone, and the stock
tends to give way to "professional" selling.
But there is an exception, and it is this exception
that sets the stage for one of our most powerful trading tactics. Our studies have shown that if
a stock that has gapped up is able to trade to a new daily high after 30 minutes of trading, the
strength demonstrated at the open was not artificial, but real. The strength in this case is real
because it's being confirmed by continued buying after the early a.m. rush (the first 20 minutes
or so of trading). This one simple discovery encouraged us to design a simple yet powerful
way for the Pristine Trader to capitalize on the stocks that are truly strong. It's called Pristine's
30-Minute Gap Buy Rule. Here's how it works.
The Set-up
The stock must gap up at the open by 1/2 or more. In most cases, a gap up much greater than
$1 will be news related (positive earnings, brokerage upgrade, etc.), which is fine. It is best if
the stock gaps open above the previous day's high.
The Strategy
Once the stock has gapped open, the trader must let it trade for a full 30 minutes. No action
other than watching the stock is required during this time. Often the trader will be watching and
monitoring several stocks that have met the above set-up criteria.
After 30 minutes, the trader sets an alert 1/16 above the high of the day, which in many cases
will not be too far away from the current price."

COOL ! Let's see if it works on AMZN today

[Cirrus]

AMZN may act differently as 1/4 of it's float is sold short! AMZN is climbing the backs of the shorts.

[skyymaster]

AMZN may act differently as 1/4 of it's float is sold short! AMZN is climbing the backs of the shorts.

Many stocks are in this Bull. But, what we are looking for is strenth to continue as it has been for the last year for this stock.

[davewooldridge]

Roderdodger, do you believe this is applicable to indeces?

[Rogerdodger]

I guess the indices might behave differently a bit.
But if one were "trapped" short this morning, it might give you a rule for covering or waiting to see if the sell-off continues.
Which so far it has.
Or if you thought this might be the beginning of a rally, it would give you a buy signal IF that 30 minute high were exceeded.
Keeping in mind other factors such as support/resistance volume, etc.


"When a stock gaps up excessively, it is usually the seller who is the smart one. This is why many stocks that gap up tend to pull back rather sharply after the first 10 to 20 minutes of trading. Once the
abundant pre-market buy orders have all been satisfied, the demand is gone, and the stock
tends to give way to "professional" selling."


The 30 minute rule would have kept you short this AM and prevented you from going long at $96.50.

http://stockcharts.c...3534&r=8846.png

Edited by Rogerdodger, 25 July 2007 - 10:01 AM.