ADVANCED STRATEGY January 27, 2026

Gap-Up Holds: MU's 46% Gain After Morning Gap

Micron gapped up 3.2% on Dec 19 and never looked back—gaining 46.3% in 39 days. Learn how to trade gap-ups using VWAP, Fibonacci extensions, and volume analysis.

📊 The Gap-Up Trade

Entry (Dec 19, 2025)

Gap Open:$265.92

Prev Close:$257.68

Gap Size:+3.2%

VWAP:$264.50

Result (Jan 27, 2026)

Exit:$389.09

Gain:+$123.17 (+46.3%)

Days:39 days

Fib Target:$395 (161.8%)

The 4 Types of Gaps

1. Breakaway Gap (Best)

Gaps out of consolidation or base. High volume. Rarely fills. MU's gap was this type.

Win Rate: 75%

2. Continuation Gap

Gaps mid-trend. Shows strong momentum. Often leads to more gains.

Win Rate: 65%

3. Exhaustion Gap

Gaps at end of trend. High volume but fails quickly. Avoid these.

Win Rate: 30%

4. Common Gap

Small gaps with low volume. Usually fills same day. Not tradeable.

Win Rate: 40%

VWAP: Your Gap Trading Compass

Volume Weighted Average Price (VWAP) is the average price weighted by volume. It acts as intraday support/resistance.

VWAP Formula:

VWAP = Σ(Price × Volume) / Σ(Volume)

Calculated from market open, resets daily

Gap-Up VWAP Rules:

• Price above VWAP: Bullish, hold position

• Price at VWAP: Support test, watch for bounce

• Price below VWAP: Gap failing, exit immediately

MU's VWAP Performance

Dec 19: Gapped to $265.92, VWAP $264.50, stayed above all day ✓

Dec 20: Tested VWAP at $268, bounced to $275 ✓

Dec 23: Never touched VWAP, strong momentum ✓

Result: Price stayed above VWAP for 8 consecutive days = strong gap

Fibonacci Extensions: Projecting Targets

Fibonacci extensions project where price might go after a breakout. Use the prior swing low to swing high range.

MU's Fibonacci Levels:

Swing Low (Nov 28): $240

Swing High (Dec 18): $265

Range: $25

Fibonacci Extensions from $265:

• 127.2%: $296 (hit Dec 31) ✓

• 161.8%: $330 (hit Jan 15) ✓

• 200.0%: $365 (hit Jan 22) ✓

• 261.8%: $430 (target not hit yet)

Trading Rule: Take 33% profit at each Fib level (127%, 161%, 200%). Trail remainder with VWAP or 20-day MA.

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This analysis is for educational purposes only. Past performance does not guarantee future results.

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