Gap opportunity setup -TSLA
Gaps are opportunity setups for trading purposes, but why?
Because at those times you know for sure that something is happening with the stock so it will move to a certain direction. It gives you a signal of one of the following scenarios:
- Someone is "exploiting" news and creating a shakeout to generate liquidity for himself so he can buy more stocks by inducing FEAR into the hearts of the paper hands.
- Someone urgently wants to get rid of his stock, so he reduces the price until he finds uninformed value investors who can take from him the stocks. Since he is the puppet master who is a giant of industry relative to the ants of uninformed value investors, there will never be more uninformed value investors demand than his supply, so the gap can't be filled.
Note to self:
To create educational idea about this.
Here I just described 2 scenarios out of 8 possible scenario combinations.
You have TrendUP/TrendDown (2)
Multiplied X by
Gap up/Gap Down (2)
Multiplied X by
Filled/ Not Filled (2)
Equals = (8) combinations.
Again, if you don't have the master puppet philosophy of stock market logic, you are always confused. If you look at the market like the master puppet, everything makes sense and you have calm and easy trading.
See my other posts about the puppet master theory and philosophy to know more.
See that there is an upcoming earnings in TSLA very soon, the stock is just begging to move...
If the stock will remain in place, and there will be gap up in earnings, there will be Island pattern so this is clear strong indication to the LONG side...
