Reading, Then Reacting
When news hits, reading the probable move after the reaction can determine
whether or not you make a profitable trade. The trick with gaps is to either
look for a reversal, and if that does not take shape, look for a good entry for
a continuation move.
09:42:25
Intraday Setup Alert
Hollywood Entertainment (HLYW)
is pulling back after an opening gap. HLYW is now up 1.22 to 16.22.
The stock rallies after a short pullback from its high. The
trick, when making these plays, is to look for a short pause, then a return rally.
If the momentum is going to resume and the stock is indeed exhibiting some
short-term strength, it should not pull back for more than three or four bars.
Anything more than that, and the move may not be a pullback, but the beginning of
a reversal back into the gap. At any rate, make sure you wait for follow through
before entering and make sure you lock in a piece of the profits when the stock
moves in your favor, as the move is many times short, in terms of time.
Until tomorrow,