HPQ is currently indicated to gap below the first target (T1 at 24.16) as the stock is trading down sharply in the pre-market session following their quarterly earning release and outlook.  As the first target, which is/was also support, has been bypassed so far with the stock currently trading at 23.35 as I type, the odds of the second and final target (T2 at 23.22) is likely to be hit and as such, is now the preferred and still final target.

My preferred strategy when a position is indicated to make a large gap in the direction of my trade is to use those order imbalances in my favor to exit the position if my preferred target is reached in pre-market trading as stocks can often recover a lot of those gains or losses once the market opens.  In the case of HPQ, I will place a standing buy-to-cover limit order with the condition to allow it to be filling outside regular trading hours (i.e.- the pre-market session and/or regular trading session).  The previous chart and notes on the HPQ trade can be quickly referenced by clicking on the blue ticker symbol (HPQ) next to the word “tagged” at the bottom of this post.

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