Monday, February 16, 2009
An Island Top is a bearish signal indicating a possible reversal of the current uptrend to a new downtrend. This pattern is an indication of a financial instrument's SHORT-TERM outlook.
The Island Top occurs when the price "gaps" above a specific price range for a number of days and then is confirmed when the price "gaps" down below to the original range.
An Island Bottom is a bullish signal indicating a possible reversal of the current downtrend to a new uptrend. This pattern is an indication of a financial instrument's SHORT-TERM outlook.
The Island Bottom occurs when the price "gaps" below a specific price range for a number of days and then is confirmed when the price "gaps" above the original range.
Gaps can serve as support and resistance levels. If greater volume occurred after an upside gap, it indicates very strong support. If greater volume occurred before the gap, then support is less strong.
Gaps occur when prices jump in response to a sudden imbalance of buy or sell orders. A scary piece of news often triggers gaps. Gaps on daily charts show reactions to events that took place while the market was closed. Had the news come out during trading hours, a gap might have occurred only on intraday charts and perhaps have led to a wider daily range.
Types of Gaps are :-
- Filled Gaps
- Common Gaps
- Exhaustion Gaps.
- Breakaway gaops
- Run away Gaps
- Continuation Gaps
A continuation gap occurs in the midst of a powerful trend, which continues to reach new highs or new lows without filling the gap. It is similar to a breakaway gap but occurs in the middle of a trend rather than in the beginning. Continuation gaps show a new surge of power among the dominant market crowd.
A gap is a chart pattern that consists of two adjacent Candlestisck, where the low of one candlestick is higher than the high of the other Candle.
A Gap is an area on a price chart in which there were no trades. Normally this occurs between the close of the market on one day and the next day's open. Gaps occur when the lowest price traded is above the high of the previous day or, conversely, when the highest price traded is below the previous day?s low.
The common gap is the most frequent type of stock gap. They occur in markets without a stron trend. Common gaps occur within the normal course of trading and are insignificant developments in terms of price action. Common gaps are minor in size, occur often, and are not accompanied by high volume. Common gaps tend to fill soon after they are formed.
Friday, January 30, 2009
Posted by Rajesh Joshi at 6:54 AM