How Do You Factor in Overnight Action for the Next Trading Day?

★ SUMMARY ★
How do you factor in overnight action for the next trading day? Are there any clues to how the next trading day will move?

The simple answer to this question is: Yes, there are some clues and things that I watch to predict the movement of a stock for the next trading day. But keep in mind these are just a fraction of the things that I watch. There are other factors that need to be taken into account and you need to see things from a bigger perspective.

The first thing I analyze is the overall market picture and what’s going on with the market. Typically I don’t just look at the overnight action. The overnight action does help somewhat, but the daily action to me is more important.

Then I evaluate the stock itself. As I look at a stock, I’m looking at how that stock has moved recently and in the day to day action. Some of the factors I analyze are volatility, price action, volume and the moving average.

Something else you have to take into account is how over extended the stock is because remember, stocks become over extended, so if it moves to the upside too far, too fast, you’ll probably see a pull back soon.

And finally, you need to watch the bigger picture moves, such as support and resistance lines. All these factors will tell you a lot more than just looking at the overnight action.

Posted at: http://tradersfly.com/2017/02/factor-overnight-action-next-day/

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