Depending on your general trade knowledge, you may or may not consider “gaps in charts” as being significant but….
You need to understand this.
Let’s have a look at Apple for an example:
Gaps Get Filled So Order Book Reconciles
You can cleary see the small “gap” in the price chart back in Feb.
Gaps are areas on a chart where the price of a stock (or another financial instrument) moves sharply up or down, with little or no trading in between. As a result, the asset’s chart shows a gap in the normal price pattern.
Orders that have been placed in this general “price zone” are essentially caught up in the system so when a stock price gap is observed, by a chance of 91.4% it will get filled in the future. In layman’s terms, 9 in 10 gaps get filled; not always, but pretty close.
Now that the gap “has been filled” in both Apple’s chart as well the Naz in general….the door is essentially “totally wide open” for prices to “now fall”.
This “bounce” has been epic but make no mistake….now that Naz gaps are filled, these 5 big stocks( FAANG) that are essentially “driving this bounce” ( thru buy backs / not true retail investing ) can roll over on the realities of coming earnings news. = the most horrible print any of these will ever report.
Every investor group on the planet knows that global GDP, is gonna print some of the worst numbers in our lifetimes in the coming quarter. The stock market is now just machines, as essentially 80% of America is flat busted…let alone the government.
Hold or sell? You know where I’m at. If you’ve weathered this storm or even better…made good on this bounce – my hat goes off to you. Truly incredible you all should be very proud.
If you want to hold on to any of the gains…..now would be a good time to do so.