On March 22nd, we published an article on our favorite setup, the Gap and Go highlighting the monster move made by $ESPR. But did you know that there can still be plenty of opportunities left? It doesn’t have to end on the first day! Sometimes the volume from a strong momentum stock still remains due to frenzy in the market. If you kept watching $ESPR for a second day, you could have traded this stock again for some more monster gains.
The Second Day of the Gap and Go
After the premarket gap up and the initial push higher, traders began selling off their shares at the $48.00 level. This is a very common phenomenon that happens in the market. Traders would pile into a stock for one last push before selling off all of their shares. Combine that with short sellers looking to hammer extended stocks, momentum stocks have a huge potential to drop like a rock.
Once the stock broke the morning support level of $44.11 there was no turning back. This was the spot to enter short. The stock dropped lower to the low $42.00s. After a small bear and the EMAs pushing the stock lower, the stock steadily dropped to lower and lower prices. Following the trend of this trade there were so many opportunities to get in for a short. There was a bear flag at $43.00, another one at $41.67, and another one at $41.10. If you were keen enough to have gotten in earlier and scale out along the way, this was definitely a stock that you want a small piece leftover for a home run trade. At one point it dropped down to the $39.00 level.
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