Special Situations – Smart money shows its hand long before the news hits the street?
Smart money typically tips their hand through their buying and selling activities. This unusual trading activity more often than not can be spotted on a stock’s chart long before the news hits the street. There are several chart formations that reflect this abnormal activity with the most common being the following: Up/down gaps, stocks within one point of a valid support/resistance trend line, volume surges (greater than 200% of the daily average) accompanied by a 5% or greater up/down price move and stocks that are making new 52-week highs/lows. Savvy traders who are aware of these formations have a tremendous leg up on the crowd and thus can stay way ahead of the game. Stocks With An Up Price Gap (Bullish): An up gap occurs on a stock’s chart when the opening price is higher than the previous days high. In order for an up gap to occur, an abnormal influx of buy orders exceeding the available number of shares for sale must exist indicating that demand far exceeds supply, a bullish co
