This morning a lot of traders saw how OGXI had gapped up yesterday from about $0.58 to about $0.75 after the close, and had some pre-market action this morning. I'm sure this stock was on a lot of traders watchlist for a potential breakout, as it should have been. Let me explain how 2 technical indicators could have helped you at the open in making a decision, to buy or not to buy? 

 

The left half shaded area is the pre-market activity, while the unshaded area to the right is market open, each bar being 1 minute. You can see that at the open the stock automatically went to red, ACCDIST remained unchanged, and MOMENTUM began to drop, this is not the setup that I like, because both indicators are not in line to favor a BUY. Another thing that I did not like at the buy was that the ACC opened up pretty high, 0.71, if you have ready my previous blogs, I think the better set ups are when the ACC line is just barely riding over the 0 line. Then, at 0631 hours we have a candlestick that closes GREEN, ACC was moving UP, and MOMENTUM was beginning to trend UP. 

0631 still would not have given you the actual confirmation for a BUY, I believe the BUY confirmation would have been at 0632 with a continued UP trend of the ACC and a clearer UP trend of MOMENTUM (dip buy). Needless to say this spike was very short lived, by 0634 hours the spike was already coming to an end. ACC began to fade away while DIST was taking over, and the MOMENTUM upwards trend was beginning to break.

From the get-go this set up would have been too ugly for me to buy based off the technical indicators I use. But, if you did buy it at the open with expectations of a morning spike, hope this blog helps you for future potential morning spikes.