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BGU - ALXN comment

ALXN had a buyable gap up at today's open on a strong earnings report. It has since pulled back, almost closing its gap.

The risk in not buying at the open is that you have a runaway gap where the stock continues higher, putting it out of reach, ie, beyond one's risk tolerance level, assuming one uses an undercutting of the low of the gap up as their sell stop.

The risk in buying at the open is that the stock closes the gap. If the stock continues lower after closing the gap, it is generally best to sell since buyable gap ups do not close their gaps. If the stock does not close the gap but closes at the low of its trading range, one could either sell or use an undercutting of the low as their sell stop.

Thus, we have suggested one buy a half position at the open, and the other half later in the day, or in ensuing days if the stock has had a runaway gap. Often, it may pull back in the days that follow, allowing for a second entry point.

This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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