raks............pssst, page-39

T4p,

I’m not trying to tell you how to suck eggs, however I thought can contribute on gaps or windows and the closing of them.
There are stocks, which are simply riddled with gaps, e.g. BHP. They are mainly big stocks, which are also traded on different exchanges like in the US and London and there opening sp are also depending on changes in currency exchange rates between the Pound/US$/Aus$. On those stocks one doesn’t have to pay any attention to the filling of any gaps at all.
However smaller stocks, usually tend to comeback to close their gaps. The idiotic thing is, it sometimes happens after years and then it is/might be really painful for holders.

CVI, on the recent retrace, closed 2 gaps previously left open. First the one on 29 Oct and then the one on 23 Oct. So a job worth doing while on a 42% retrace anyway. Some would argue, closing the windows, was the reason for the retrace.

One good thing is though, what is true for windows left open on the way up is also true for windows left open on the way down, which in turn will answers your question about the gap down on Nov 13th. We’ll look after that on the way up again! Btw, windows can only be filled on the right hand edge of the chart everything else is in the past and doesn’t count.

Looking at the above, it is important to keep those open windows in mind and use the possible filling of them for trading opportunities at the same time. Technically speaking, if a stock is retracing and you are at a loss of finding a reason, just have a look for an open window and if you see fit place an order on the closing price of the gap. Chances are the stock will turn around right there or just under.
Another thing is, we very often see a stock opening with a gap up only to retrace minutes later, fill the gap and then shoot of again. Certainly it can be explained in all sorts of ways, but technically speaking the stock is simply closing the opening gap. If you would check CVI’s buying column right now, you would find quite a large number of buyers at 26.5 and 26c. These guys think their chances of getting their orders filled are quite high, as it would fill the window once again.

Hope the above is or better will be of some use in the future!