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Last Friday, on my 1 min chart of the OEX, I saw a small upside gap opening
(as expected), followed in due course by a contra-opening move (as expected)
but which failed to close the gap (not expected). Then prices rallied back
to the high of the morning and drifted there for some minutes before
breaking out to the upside. And you know how the day finished up.
Question: is that pattern sufficiently common or reliable enough to justify
taking a long position on the failure to close the gap, or is it more
prudent to wait until the high of the morning is taken out?
Seems that, sometimes at least, if the opening gap isn't closed, then you
can see a pretty good rally in the direction of the gap. Might pay to get on
board early.
Clint
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