Sunday, January 4, 2009

Friday was HOT

Friday (January 2nd) was the first trading day of the new year.
One of the best trades of the New Year was HOT (Starwood Hotels).  HOT gapped up higher on a rumor that Sam Zell was acquiring more shares in company.  Not only did HOT gap higher on the rumor, but the gap higher was thru any prior resistance.  (See attached chart).  On a technical level, this is what traders like to look for.  A stock gapping higher or lower on a daily chart thru prior resistance or support with above average volume. The traders' who were short HOT, were locked in because of the gap and had to cover at higher prices which propelled the stock even higher.  Good luck trading this year, Michael.