Like To Play Gaps? Here’s One Way To Do It
Tight consolidations can make for good setups, as
volatility re-expands. Chris Tyler explained it nicely this morning when he
posted this:
Intraday
Update
InVision (INVN)
is now forming a strong intraday consolidation pattern from which reversals or
continuation plays make for solid setups. After gaps up of this magnitude,
much like InVision this morning, a battle will be waged ( the consolidation)
between the bulls and bears. Disbelief, euphoria, greed and fear are all caught
up in this heated fight, until one side capitulates. As daytraders, we’re
looking to enter as this tug of war is coming to a conclusion, that is, as one
side is overcome and the trading range is broken by the other group. With a
relatively tight intraday range of about .65 cents, INVN is a prime candidate
for those ready to play this pattern setup.
The stock is currently up 2.73 at 25.70.
Going back to an earlier commentary I wrote, the
trader that simply entered an order before the open on good news more than
likely got shaken out on this one as the stock pulled back. The trader who
waited, by contrast, got a better price and entered at a lower risk
level.
Remember, the word “speculate” is
derived from the Latin “specular,” (to observe). Watching and waiting
for setups like these usually gives you better results.
Brice