Skip to main content

Gaps - In the spaces there's meaning

Many traders treat gaps as serious indicators. At Alert HQ we are now bringing gaps into our technical analysis. Here's how.

In an effort to further reduce false signals in our Swing Trading Signals, we now take gaps into account. We avoid declaring a BUY signal if the stock has had a gap down within the last two weeks unless the gap has been closed. For SELL signals, the processing is the converse.

New Feature at Alert HQ: Gap Analysis Signals --

The big news, however, is that we have developed a new screen that is focused on gaps. As we scan 7000 or so stocks three times a week, we now log all the gaps we detect and create the following four signals:
  • Bullish - Gap Up: a gap of more than 3% to the upside
  • Bearish - Gap Down: a gap of more than 3% to the downside
  • Bullish - Closed Gap: after a gap to the downside, the stock subsequently moved up so that the most recent closing price is above the original gap level
  • Bearish - Closed Gap: after a gap to the upside, the stock subsequently moved down so the most recent closing price is less than the original gap level
In all cases, the most recent incident within the last five trading days is logged.

Now at Alert HQ we are providing a page specially devoted to the gap screen, the TradeRadar Gap Analysis Signals page. This feature is so new it is not yet accessible from the TradeRadar menu.

Today's gap results --

This first offering of our Gap Analysis Signals provides a big list of stocks and ETFs. There are a total of 294 signals broken down as follows:
  • 128 Bullish - Gap Up signals
  • 144 Bearish - Gap Down signals
  • 5 Bullish - Closed Gaps
  • 17 Bearish - Closed Gaps
Two observations:
  • The bears have an edge over the bulls in this list but, given the fact we have had three straight down days in the market, that is no surprise. What is surprising is that there are so many bullish signals despite the declining market.
  • Low volume stocks, especially those that are low priced, seem to be prone to gaps of more than 3% without exceeding their volatility envelope.
Conclusion --

Our Gap Analysis Signals page will be another good source of ideas for your short to intermediate-term trading. As always, it is free. I expect to get the page integrated into the TradeRadar Alert HQ menu soon but until then, you can use this post to access the page.

Feedback is welcome. Check out our new Gap Analysis Signals page and leave a comment to let us know what you think of it.

Comments

Popular posts from this blog

Running TradeRadar on Windows 7 and Windows 8

Development of the original TradeRadar Stock Inspector software was begun back in the days before Windows 7 and Windows 8 were available.

As these newer versions of Windows have become more popular, we have heard from some users that they are having problems installing and running TradeRadar on their newer PCs.

The good news is that TradeRadar will work just fine on Windows 7 and Windows 8. All you have to do is adjust the Windows Compatibility Settings to ensure TradeRadar runs as intended.

It is recommended that you can apply Compatibility Settings when running the initial installation; however, it is also possible to apply Compatibility Settings after the program has been installed.

Prior to installation
After downloading the install program, go to the folder where you have stored the TradeRadarStkInsp_7_Setup.exe or TradeRadarStkInsp_7_PRO_Setup.exe executable. Right-click on the executable file and select Properties. Click the Compatibility tab. Adjust the Compatibility mode to …

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. (Click here to read the original post)

There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position.

This first post in the series starts at the beginning: getting good investment ideas.

Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets.

As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professionals and …

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. (Click here to read the original post)

With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas.

Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what to lo…