One of the basic theory behind gap days.
When underlying gives gap up above yesterday's range and sustains above that for one hour+ means market participants has accepted the new range and are willing to buy at higher price. So fresh buying and short covering are likely.
(1/n)
When underlying gives gap up above yesterday's range and sustains above that for one hour+ means market participants has accepted the new range and are willing to buy at higher price. So fresh buying and short covering are likely.
(1/n)
If price opens gap up out of PDR but fails to hold on to hourly low which means market participants haven't accepted new range yet.
So in that case it's likely to test PDH first if that also doesn't hold then PDC and even PDC doesn't hold price then likely to test PDL.
(2/n)
So in that case it's likely to test PDH first if that also doesn't hold then PDC and even PDC doesn't hold price then likely to test PDL.
(2/n)
Similarly
When underlying gives gap down below yesterday's range and sustains below that for one hour+ means market participants has accepted the new range and are willing to sell at lower price. So fresh selling and long unwinding are likely.
(3/n)
When underlying gives gap down below yesterday's range and sustains below that for one hour+ means market participants has accepted the new range and are willing to sell at lower price. So fresh selling and long unwinding are likely.
(3/n)
If price opens gap down out of PDR but fails to hold on to hourly high which means market participants haven't accepted new range yet.
So in that case it's likely to test PDL first if that also doesn't hold then PDC and even PDC doesn't hold price then likely to test PDH.
(n/n)
So in that case it's likely to test PDL first if that also doesn't hold then PDC and even PDC doesn't hold price then likely to test PDH.
(n/n)
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