Wednesday, October 1, 2014

ACAD: Filled the Gap

A frequent term used in technical analysis is "filling the gap".  When a stock opens the day much higher than the previous day's close, it creates a gap of no trading volume between the previous day's close and the current day's open.  I mentioned this gap last week after ACAD received the "breakthrough therapy designation" from the FDA, which was a very positive news release, but also noted that it created a gap in the chart that was pointed out below, last week.
Fast forward to today and the present chart that ACAD has, and you will notice that the gap was indeed filled today, and a small bounce higher once that occurred from the chart below.  
Bottom Line:  The gap that needed to be filled, was in black and white, and that is what technical analysis is all about.  Eliminating the emotion, and seeing the chart for what it really is created a low risk buy point.  We are long term shareholders of Acadia Pharmaceuticals.  Thank you for reading.

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