Ask Vendit Off Topic Questions

[Walkingshadow]

MMK,

I think it is a common misperception that gaps must be filled. In the case of the intraday gap you mention, the important thing to note IMHO is that IRF is just now testing the 200 min ema, which is also now horizontal:

http://www.askresearch.com/cgi-bin/intraday?index=%24COMPX&intraday=symbol&symbol=irf&ex...

This is occurring in the context of oversold conditions and weak technicals, but no evidence of strong downward momentum. That signifies to me that the stock will more likely stabilize here, and support will hold. If intraday support from the 200 min ema holds, a filling of the intraday gap from Thursday becomes unlikely. If intraday support fails, it becomes likely.

Of note, the excessive gap up the next day suggests strong retail buying pressure, which the MMs will whipsaw. That's exactly what happened with IRF on Friday: excessive gap up, MM's immediately proceeded to take it down hard, then the stock found real buying pressure as they reversed course and began to walk it back up again.

http://www.investorshub.com/beta/read_msg.asp?message_id=53886

That doesn't mean the late-session buying on Thursday wasn't real at all, however. The volume at that time was fairly strong, so more than likely it was largely professional buying, possibly with MM complicity and cooperation. In retrospect, it looks like something of a bull trap rally, but not infrequently these types of things presage the real thing.

JMVHO, as always.........

WS