Gap Up and Go Stocks

A stock that moves up sharply at the opening compared to the previous day's close price. It is referred to as a gap up move because it makes a big price jump from the price of the close to a new price at the open.

There is no one method to trading gaps. The reason gap moves are interesting to traders is because volatility attracts technical trading opportunities. Traders will still have to determine if the gap move is the beginning of a larger upward momentum play or the gap move will fail and the stock retrace filling the gap.

The gap and go strategy is considered a pure momentum play. The trader will try to profit from an anticipated larger move following the gap. The gap and go list helps point to the price action but traders will then focus on other tools and data to help them make a trading decision.
News: They will check if there is a news catalyst that supports the stock price behavior. You can use the market chameleon press release scanner to quickly find if the company issues a press release to the investment community.
Volume: Technical traders will also analyze the volume behind the move. The volume can be compared to the float, outstanding shares or the average daily volume to get a sense of the relative volume behind the move. This gives you a sense of the strength or conviction of the move.
Price Action: Since this strategy is a technical momentum play, traders will study charts and technical indicators such as breaches for previous days high or how the stock is behaving relative to its premarket range.