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Todays Big Stock Wealthpop News

How To Play This Tech Stock After A Gap Up


Our stock today recently has a significant gap up from about 50 to almost 68, but now the stock is at risk of giving some of those gains back. After the gap up, the stock’s price came crashing down over the last few days testing an old support level of 58.5.

This is a key inflection point for the stock and traders of it. One the one hand, you could see the stock bounce here and go higher, somewhat of a risky trade seeing as how the stock had an almost $10 sell off after reaching 68. However, if the stock was to break down this level in a meaningful way, you could see the gap filled to the downside all the way back to 50.

Because this 58.5 level only really has one recent instance of resistance, the level of support it has become shouldn’t be looked at as super strong. The trade to watch here would be to see how price reacts to the 58.5 support level and act accordingly. There is no anticipating moves in trading, you only take what the market gives you.

Enact proper risk management and size your position for at most a 20% loss on the trade, but only at the level in focus. Otherwise you may get stopped out too soon only to see the trade then go in your direction. Price action will tell us which trade to take at this 58.5 level. If price looks like it wants to bounce and continue higher then that is the trade to take. If price action looks weak, then shorts are up.

Do not let your anticipation of a move dictate what trade you make, that is how you set yourself up for some headaches.

Learn to find these levels for yourself when you join The Profit Machine. There, you’ll learn all about my favorite stocks, setups, strategies, and plenty more. You’ll also be invited to weekly webinars where I answer questions and go over important trading lessons, like the one in today’s article. The best part, you’ll also receive live trade alerts. Not only will you get a world-class education, but you’ll earn while you learn.

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Good Luck With Your Trading!

Christian Tharp, CMT

Christian Tharp

I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group. My Chartered Market Technician (CMT) designation substantiates me as an expert in areas such as the technical analysis of stock trends, market indicators, cycles, price patterns, Elliot Wave principles, Candlestick charting, analyzing financial trends and behaviors, portfolio strategies, and forecasting future price movements. With my straightforward approach to simple, systematic trading, students learn how to strategically assess buy signals and market entry timing, establishment and management of stop losses, and how to employ a simple and disciplined trading approach that creates profits.

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