Mike
08-23-2016, 10:34 AM
This morning MBLY, a watch list stock gapped up beyond a classical buy range. The buy point description in the watch list was a pullback to the 10-week with a buy pivot of $46.00. With the gap up, MBLY may have converted to another type of purchase situation. Gap ups can be considered a buying opportunity. A successful gap opportunity continues the move upwards and does not close below the low price of the gap up day.
I show a snapshot of the Volume Trigger Alert page below. I sorted the list by the "Vol Trig Mrgn%" column which brings MBLY to the top of the list. Notice that the value of this column shows 581.07% meaning that the extrapolated End-of-Day (EOD) volume is 581% above the largest down-day volume in the past ten trading days. The EOD volume is estimated at almost 20 million shares, more than 300% above average volume. This page can be used to gauge unusual volume. The process behind the extrapolation to EOD uses an extrapolation algorithm developed from NASDAQ intraday volume over many days.
37531
If you adopt the low price of the gap up day as your stopping out point, the risk associated with a gap purchase is how close to the low, did you buy the stock? Buying a gap-up in the days after the gap can be quite simple as long as the price hangs around the low for a while. Buying on the day of the gap can be problematic, as the actual low will not be established until the day closes. You are left with a provisional low if you buy on the gap day. Bill O'Neil once said in response to an attendee question: "If this were easy, everybody would be doing it!" That comment fits today's decision if you choose to enter MBLY. I have entered the position. I normally wait for the close of the day to determine if my purchase has failed.
I show a snapshot of the Volume Trigger Alert page below. I sorted the list by the "Vol Trig Mrgn%" column which brings MBLY to the top of the list. Notice that the value of this column shows 581.07% meaning that the extrapolated End-of-Day (EOD) volume is 581% above the largest down-day volume in the past ten trading days. The EOD volume is estimated at almost 20 million shares, more than 300% above average volume. This page can be used to gauge unusual volume. The process behind the extrapolation to EOD uses an extrapolation algorithm developed from NASDAQ intraday volume over many days.
37531
If you adopt the low price of the gap up day as your stopping out point, the risk associated with a gap purchase is how close to the low, did you buy the stock? Buying a gap-up in the days after the gap can be quite simple as long as the price hangs around the low for a while. Buying on the day of the gap can be problematic, as the actual low will not be established until the day closes. You are left with a provisional low if you buy on the gap day. Bill O'Neil once said in response to an attendee question: "If this were easy, everybody would be doing it!" That comment fits today's decision if you choose to enter MBLY. I have entered the position. I normally wait for the close of the day to determine if my purchase has failed.