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shotsky

09/26/17 12:04 AM

#107962 RE: Coz Mabluda #107957

Gaps are normal when a stock opens higher than it closed. Some believe that gaps always must close, meaning the stock price drops back to that close, then goes up from there - or not.
The problem with that reasoning is that there is no reasoning to it at all. It is a myth. What is true is that these stocks go up and down all the time, and so most of the gaps close naturally. It's just a byproduct of the daily and weekly stock transitions.
But thinking that every gap must be closed is silly. Stocks sometimes move to a new level and never close a past gap. The gap is meaningless. But that doesn't stop those that have their 'special rules' for investing...They will believe it fervently and talk about it incessantly.