Island Gap reversal is one of my favorite trade setups. Which we talked about it numerous times in our blog with live examples. Following are some of the trade setups and tutorials.
Nifty Futures Daily Charts
In theory, island gap reversals are nothing but a gap closed by another gap. No volume occurs in this zone. This zone is a high probability short term zone. At times it gives trading opportunities and at times it even provides investing odds as well where the destination target is always the filling of the gap.
Current Island reversal gap in Nifty spot is between 11479-11484 band. Island reversap gap got created post exit poll announcement from there a steep rally is seen.
When such kind of bigger gap is creating an island gap reversal from our past experience a revisit to close the gap will be attempted within 2-4 weeks duration from here.
Short term optimism is still holding up in the air but still not yet realized from the price perspective. A word of caution for the fellow traders.