wayward's - exaggeratiom of emotion friday, page-47

Just another quick note on gaps, I check the XJO charts to confirm the underlying trends and chart patterns so that I can confirm my option trades on the blue chips.

Indeed there is a gap on the XJO that will most likely get filled at some point and that holds true on the 3 shares I have call options on, they all have gaps there.

In saying that though, on all 3 of my trades, CBA, NCM, WBC plus most of the other big blue chips there is a gap still to the north that also must be filled. So you can be worried about the gap south being filled or you can realize that there is a gap on most stocks still to the north.

Gaps make very good targets, I was targeting the downside gap on the way down and I am targeting the upside gap on the way back up.

Here is an example I drew up a few days ago...