Here’s One Way To Buy A Strong Stock When It Gaps Down

  • October 28, 2004
  • Tsutae Kamada

A stock breaks out of a
trading range and hits a new high on heavy volume. If you see it, 
you probably expect a continuation of this upward move. Look at the daily chart
of Apple Computer (AAPL) below. It closed strongly at a new high
yesterday.

09:38:46
(From TradersWire)

Intraday Setup Alert


Apple Computer (AAPL)
is pulling back from yesterday’s high. Long AAPL above 50. Risk 25-30 cents.
Look for near Wednesday’s high. AAPL is at 49.79, down 0.51.

Sellers stepped in, and Apple gapped down at the open. Look at the very first
bar. It has a bullish long tail. Definitely, buyers were waiting for a pullback.
Shortly after 9:45, the stock successfully took out 50. Another entry could have
made when AAPL moved above yesterday’s high.

Have a nice afternoon session.

T.Kamada

Feel free to mail me your questions.

 

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