+++i think this is too simpistic. for example, what is the probability that elan fits into the 30% of those that don't retrace ? e.g., the probability may be 98-99% that elan is in that category. i would guess that those that didn't retrace had significant changes in fundamentals or significant news flow as elan has had+++
Exactly so ... it is a very simplistic analysis. The fact of the matter is Elan might be in the 30% category ... or not. The reasons that a stock doesn't retrace after a gap are numerous and might have nothing to do with the fundamentals or news of the stock in question. A great day in the overall market, good comments on a particular sector, positive comments from Greenspan, the start of a war or the end of a war .... the list goes on and on, and makes the "guess" about why a stock did not retrace, exactly that ... a guess. All I've said is that in approximately 70% of the cases of roughly 35,000 stocks, in some 400,000 cases of a gap up ... the stock retraced to the fill the gap. Take it for whatever it is worth. I don't offer it as trading advice .... just an insight.