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There is a popular belief that gaps must be filled however there are many
occasions when this does not happen. What does happen frequent is that
broken support, which becomes resistance, is often retested. Generally, when
I want to short, I wait for the open so I don't get caught with an open
order in a gap down market. I then look for a return to the broken support
line (pivot low) and fade it with a limit order by a small amount.
Note that I do not have a position in EBAY. It's a personal preference but I
don't like to short stocks which are wildly popular.
Earl
----- Original Message -----
From: "Dan Harels" <harelsdb@xxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Cc: <HaleMeToo@xxxxxxx>
Sent: Tuesday, October 23, 2001 11:41 PM
Subject: [RT] EBAY hand holding
> Dorothy, Earl and others,
>
> A day or two ago, Dorothy highlighted EBAY as an interesting stock. Earl
> posted that it had potential and, without making any recommendations, he
> suggested that it be watched for an entry on a retracement to the vicinity
> of 56. My assessment of why EBAY is a good short and why 56 is a good
entry
> follows. I would appreciate comments from Dorothy, Earl or others that
> point out factors that I am missing or that I am under/over emphasizing.
I
> am still learning and it would not be a good idea to trade based on my
> analysis.
>
>
> Good short (as of 10/19)
>
> 1. Lower high
> 2. Broke through 50 and 200 d MA on high volume
> 3. Gapped down on high volume
>
> Good entry @ about 56 (as of 10/23)
>
> 1. 50 and 200 d MA at about 55
> 2. bottom of gap at about 54.75
> 3. 38.2 percent retracement at about 56.19
>
> Also, why is 56 a better entry than 60 which is
> 1. top of gap from 10/18 - 10/19 and
> 2. 50 percent retracement.
>
> Thank you for your help.
>
> Dan
>
>
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