I'm with you on the "breakaway gap" theory. Looki
Post# of 72436
Quote:
There is such a thing as a "break-away gap" -- a gap that is never filled. I expect that to be the case when a deal is announced -- there will be a gap up and, despite eventual attempts to hammer the price down to let any remaining shorts cover, the gap probably won't be filled.
However, watch out, here comes my DNDN story again.
I sold my DNDN at 7, having doubled my money in a relatively short period of time. I thought I was smart.
The VERY NEXT DAY it gapped up to 21 on news of approval of their drug.
That day there was a very fast intraday plunge to 7, and within the space of a minute, it went to 7 and was back up to 21. My assumption was that a few people were silly enough to put hard stops on their positions, and the market makers plunged it down quickly to pick up those shares.
LESSON: if there is a huge gap up, DO NOT put stops on your shares. Take sick leave that morning, watch the stock, and decide if you want to sell, but do NOT put on a stop with your broker, because you could be cheated like those DNDN people were.
![Like This Post](/images/thumb-up.png)
![Dislike This Post](/images/thumb-down.png)