Usually there will be a defined premarket resistance level. The premarket level keeps dropping and eventually falls below the 1M EMA right before market open, where the stock will open.
- There is a predefined premarket resistance level. May be an early entry point (2nd Bar).
- If the overall news is bad it will keep dropping.
- If no significant news, after the initial drop, it will comeback to the 9/15 EMAs.
- Once the stock starts coming back up – the open/1M EMA or the pre-market resistance may serve as the resistance level
One reason for this scenario is that the stock has had a good run and is now flattening so people decide to sell – anticipating a decline.
Based on 24 December, 2019
Category: OPEN BELOW 1M EMA ABOVE 5M EMA