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| Discuss should gap use as a support or resistance? at the Technical Analysis within the Traderji.com - Discussion forum for Stocks Commodities & Forex; i have simple query.. should gap up or gap down should be used as support ... |
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#1
27th November 2007, 08:26 PM
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should gap use as a support or resistance?
i have simple query.. should gap up or gap down should be used as support or resistance i have attached a chart of bharti plzzz let me know how will gap works on this chart and how much volumes matters in gap up or gap down..... senior member plzz help ....
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#3
27th November 2007, 09:10 PM
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Re: should gap use as a support or resistance?
Quote:
>breakaway gaps > runawaygap s > exaustion gaps >common gaps not always does the gap work as a support or res....u have to also note the volumes ,how long the price osscilated at that particular area ? & also identify which type of gap it is.
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#5
28th November 2007, 12:03 AM
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Re: should gap use as a support or resistance?
Quote:
the bharti chart has a runaway gap which typically happens on low volume . In any case volume doesn't play a key role in runaway gaps. Also its important to note that runaway gaps usually take a much longer time to be filled as it implies the presence of a very strong trend. Breakaway gap is usually preceded by a classical break-out like ascending triangle , rounding bottom ,inverted h & s etc... the key point in a break-away gap is that if the volume is high before the gap then there are even chances that it will get filled even in a minor reaction and in that case the gap area may act as a support. Find BHEL chart which shows a breakaway gap , between 2462-2503 area after a rounding bottom formation ,which got filled in the recent correction.. Last edited by rajaram.dilipkumar; 25th May 2008 at 11:11 AM.
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#6
28th November 2007, 12:35 PM
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Re: should gap use as a support or resistance?
Quote:
plzz continue posting about rest of the two gaps >exaustion gaps>common gaps with charts it will be great help......
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#7
28th November 2007, 01:33 PM
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Re: should gap use as a support or resistance?
Quote:
Exhaustion gaps can be identified only with the price and volume action after the gap has already happened and normally it happens quite close to a up or down move indicating a reversal..will post if i see one on the charts. Normally it difficult to make money from exhaustion gaps while breakaway and runaway gaps provide fantastic trading opportunities . Last edited by rajaram.dilipkumar; 25th May 2008 at 11:11 AM.
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#8
28th November 2007, 02:24 PM
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Re: should gap use as a support or resistance?
exhaustion gap in indian bank gets completed by downside breakaway gap leading to a pattern called island reversal...as you can see from the chart we cant make money from exhaustion gap as it often seems like a runaway gap ( which indicates strength while exhaustion gap indicates reversal ).
Last edited by rajaram.dilipkumar; 25th May 2008 at 11:11 AM.
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#10
2nd December 2007, 01:57 PM
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Re: should gap use as a support or resistance?
Quote:
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