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Why do stock gaps act as support and resistance?

Because the stock gap range failed to form effective transactions.

It is possible that trading funds will be squeezed into the gap range.

This results in stock gaps having resistance and support.

In the stock market, due to the lack of effective trading in the gap range of stock jumps, trading funds in the gap range may be squeezed, resulting in resistance and support for stock gaps.

Usually, when there is a gap in the stock price, the gap price formed does not have the funds for effective trading, which means that many investors are short.

In the subsequent stock correction, these short funds are likely to buy, resulting in some support for the stock price.

On the contrary, when the stock price jumps short and opens a gap at a low level, there are no effective trading funds in the gap price, resulting in some funds not being effectively sold.

In the subsequent stock rebound, selling the stock gap may significantly sell the stock, causing resistance to the stock price rebound.

But the resistance and support for stock short gaps should be determined by stock-traded funds.

If the stock price jumps high and forms a gap, the stock price will fall back. The funds for selling the stock will be more than the lower buying funds. The support of the stock will be weak, and the stock price may make up for the lower gap.

On the contrary, if the stock price jumps short and opens low to form a gap, the stock price rebounds, and the funds to buy the stock are more, which is significantly greater than the funds to sell above, the resistance of the stock will be weak, and the stock price is likely to make up for the gap above.

1. A stock gap refers to the opening price, lowest price or highest price of the stock price on that day being higher or lower than the closing price of the stock on the previous day, thus forming a gap in the stock price.

Normally, a stock jump is caused by good or bad news, which causes funds from the long and short direction of the market to stimulate the stock price.

Under normal circumstances, stock trend gaps are also divided into stable gaps and rising breakthrough gaps.

2. Securities companies will provide different commission rates based on customers’ telephone transactions and online transactions.

Generally speaking, commissions charged for online transactions are very low.

Additionally, some places charge a commission fee.

This fee is mainly used to pay for communication and other expenses, and is generally calculated based on the amount (the sales department of the securities company decides whether to accept it. In places where there are many securities companies, they compete with each other and most of them cancel this project.