Look for Follow-Through Potential
When a market closes strongly in your favor, it has a higher-than-normal
likelihood of following through the next morning. This means a long position
that closes in the top of its range will likely move higher early the next
trading day. I believe this occurs because buyers are not filled and this
momentum spills over into the next morning. The same is true for short sales
when the market closes near or at the bottom of its range.
—Jeff Cooper, from
Hit and Run Trading (1996, M. Gordon Publishing Group,
Malibu, Calif.).