how does a gap in a stock price affect the overall support and resistance areas
and why does the gap fill strategy work so often I'm gonna break it down in this
video how we treated mr NS this morning trading the gap fill strategy figuring
out where to take profit on this gap tell strategy here on mr NS so stay
tuned so we're taking a look here at mr NS this morning it gapped up from a
three dollar area it got up here pre market had a little bit of trouble there
at the four dollar area pulled back and then end up going higher and higher and
higher all the way up here to 540 so that was a big move from 350 up there to
540 basically pre market right there at opened big jump up and then all of a
sudden got that kind of same move I got that 540 area and then crashed down well
why did that happen what was the reason where was that resistance at where was
that support at if you look at the daily chart give you a better idea looking at
the weekly chart actually you can zoom out back here and go back in time here
looking at mr NS this stock used to be up in the $20 it's gotten killed
recently like most biotech stocks do but you can see here this gap on the chart
this is what we were looking at this gap right here from the 525 area down here
to the 198 $2 area and then he kind of bounced around there recently
you know December 10th of last year this was like 97 cents so it's actually under
$1 for a little bit but you can see this gap was actually back in June July of
last year and kind of break this down show you guys exactly where that support
resistance is so right there at the bottom is candle you know we've got five
thirty 525 area Bing that's that gap so the gap it gaps down
here opens us up you can see right on the chart it's very clear there's a gap
in the chart basically bad news came out everybody ended up selling they got out
there's a bunch of selling get this huge gap down the price gaps down basically
when I say gaps down it went from five dollars to two dollars instantly there
is no buying and selling in between there it was literally just bang down so
I probably got halted I had really bad news it came out after hours or whatever
it was the stock opened much lower and you can see their crash if you go back
to the five-minute chart now you'll see where that resistance comes in so there
it is that resistance that we're looking at from early
where that gap the bottom of that gap was at the 525 area and then look at
this five-minute Kaelin here ride it open
5:27 holding it down there it got a little spike up there obviously you know
gonna be some bit of a wiggle room there we can see that was all selling it was
nothing but selling above that 525 area if you look here at the one-minute chart
you can see it a little bit better how that worked out there and it basically
got right up there got a lot of resistance there at the 544 area you
know people were hoping we got a break over that gap area that 525 they thought
you know we might get a move above 525 go higher and higher you know 556
dollars if this news is really good but you see what happens the shorts piling
right here they know they can short it down they know that gap finally filled
the gap filled the buyers who bought this morning are now selling they're
taking profits because they also know the resistance is there and bang so
basically what you have is that people chasing right here chasing this chasing
this chasing this trying to get that move thinking that this is gonna go
higher and higher and bam em RNs gets killed there so at that point it was up
like 60 70 percent shorts pile in there on this candle it goes from 539 down
there to 501 so 40 cent move there crashes down there right away down this
fight our area find some support there I got in there at the break of 5 hours
looking for that move up to that resistance so that was kind of my goal
$5 whole dollar mental resistance is gonna be there at the whole dollar
looking for that gap to finally finish finally fill that gap all over there to
525 area I took profit a little bit lower em RNs working out filling that
gap perfectly if you can look here I don't know if we're really basically
right there up there to that 540 area go across here the bottom of this candle
right there at the 5 kind of 56 area so it got right to the bottom of that gap
it got crushed afterwards and came back down so mor NS filling the gap there
showing you guys exactly how that worked out
a gapped up we had good news so we got this gap up from $3 up there to that $4
area and then got the buying coming and got the pressure the reason that gap
bills is you get a lot of just empty space in the chart there's not a lot of
resistance there's not a lot of support and people start buying people start
rushing in there trying to FOMO they get the they're chasing it they're trying to
get it go higher there's a little bit of news the stock has momentum has the
volume there look at the volume on this if you look at the daily chart there's
20 million shares traded today big spike in volume so you can see it
gaps down volume kind of bouncing around a lot and then the volume this morning
spikes it up so the gap fills and now we'll see what happens if it wants to
hit higher mr and s if it finds support here in the four dollar area or if it
just wants to come back down to $3 we'll see how good that news really is and
kind of play into that impossible short that's one of the reasons that a shorted
mr NS once that gap filled because I knew the gap filled people started
taking profit and it's time to short it and you can see it kind of worked out
there mr NS this morning for the people who went short they're at this five
dollar area 520 area got that moved all the way back down here to the 14th so we
basically came back down to that support from pre market it looks like it has a
little bit of support there at the 410 area it kind of moved back up here the
four 80s and now it's selling off again we'll see what happens later on today
but this is a perfect setup mr n su does not get any better than this when it
comes to a gap fill and there it is nothing new it's not rocket science it's
not something that I traded it's literally just the idea of the gap on
the chart filling and playing into that momentum when it's there
you