GDOT buyable gap-up (BGU) example
Mis à jour
GDOT is a great example of how to play using BGUs. Notice a) the volume signature and b) how each BGU does not violate the low of the candle (stops can be placed 2-3% below the low of the BGU candle).
A buyable gap-up (BGU) is a powerful buy signal that should meet the following criteria:
1. Buyable gap-ups should occur in fundamentally sound and leading stocks, or there should be a compelling thematic basis for consideration.
2. A buyable gap-up move, in other words the height of the gap-up “rising window,” should be at least 0.75 times the stock’s 40-day Average True Range. In most cases, however, one can simply “eyeball” the gap as being of a substantial and powerful nature. Small gap-ups are not what we’re looking for here.
3. A buyable gap-up move should occur on volume that is at least 1.5 times average daily trading volume.
4. Buyable gap-ups should occur within an uptrend or constructive consolidation, not while a stock is in a downtrend. In the case of a “bottom-fishing” buyable gap-up (BFBGU) the gap can occur coming out of a low base consolidation as a stock is trying to round out the lows of and recover from a prior intermediate- to longer-term decline.
5. A buyable gap-up should hold above the intraday low of the gap-up day, and one can therefore use the intraday low of the gap-up day as a selling guide.
Examples of buyable gap-ups: TSLA on May 9, 2013, NVDA on May 13, 2016, and BABA on August 11, 2016.
Examples of bottom-fishing buyable gap-ups: AMBA on June 3, 2016 and CUDA on July 8, 2016.
This instructional video explains a buyable gap-up in more detail.
Reference: gilmoreport(dot)com/education/gilmo-glossary/
A buyable gap-up (BGU) is a powerful buy signal that should meet the following criteria:
1. Buyable gap-ups should occur in fundamentally sound and leading stocks, or there should be a compelling thematic basis for consideration.
2. A buyable gap-up move, in other words the height of the gap-up “rising window,” should be at least 0.75 times the stock’s 40-day Average True Range. In most cases, however, one can simply “eyeball” the gap as being of a substantial and powerful nature. Small gap-ups are not what we’re looking for here.
3. A buyable gap-up move should occur on volume that is at least 1.5 times average daily trading volume.
4. Buyable gap-ups should occur within an uptrend or constructive consolidation, not while a stock is in a downtrend. In the case of a “bottom-fishing” buyable gap-up (BFBGU) the gap can occur coming out of a low base consolidation as a stock is trying to round out the lows of and recover from a prior intermediate- to longer-term decline.
5. A buyable gap-up should hold above the intraday low of the gap-up day, and one can therefore use the intraday low of the gap-up day as a selling guide.
Examples of buyable gap-ups: TSLA on May 9, 2013, NVDA on May 13, 2016, and BABA on August 11, 2016.
Examples of bottom-fishing buyable gap-ups: AMBA on June 3, 2016 and CUDA on July 8, 2016.
This instructional video explains a buyable gap-up in more detail.
Reference: gilmoreport(dot)com/education/gilmo-glossary/
Note
Also an objective, systematised strategy for playing earnings with defined risk. Reference: "In the Trading Cockpit" by Chris Kacher and Gil Morales.
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.