When you look at the pre-market quotes in the morning, you see a significant gap up.
“It looks strong today.”
Even though you thought that, it falls the moment it opens at 9:00 AM.
In the end, the price near the opening becomes the high for the day.
This type of price movement is called
“Yoriten”
.
It is a very common term in day trading.
What you should be especially careful about is
“Significant gap up = strong, so buy”
thinking that and jumping in right after the opening.
A gap up and being bought after the opening are two different things.
In this article, we will cover:
-
What is a Yoriten?
-
Why do stocks that gap up become a Yoriten?
-
The relationship with profit-taking sales
-
Price movements that tend to lead to a Yoriten
-
How to view the opening price
-
The relationship with VWAP
-
Combination with trading volume
-
Comparison with market conditions
-
The danger of assuming it is a ‘Yoriten’
I will explain about these.
What is a ‘Yoriten’?
A ‘Yoriten’ generally refers to,
a price movement where the stock hits its high for the day near the opening and then declines.
it refers to this.
For example,
Previous day’s closing price: 3,000 yen
Next day’s opening price: 3,300 yen
Let’s assume this.
This is a significant gap up.
However,
It opened at 3,300 yen
↓
3,320 yen
↓
3,250 yen
↓
3,150 yen
↓
3,050 yen
and then fell.
As a result, the morning high of 3,320 yen became the high for the day.
This is the typical image of a ‘Yoriten’.
Why does it fall even after a gap up?
When there is a significant gap up,
“It started high because there were many people who wanted to buy”
is one way to think about it.
So, why does it fall after the opening?
One reason is
profit-taking sales
.
For example, suppose someone held a stock at 3,000 yen the previous day, and it started at 3,300 yen the next morning.
That is a +10% gain overnight.
In that case,
“It has gone up enough, so let’s sell”
is a thought that more investors might have.
Even if there are many buy orders before the opening, once it actually opens at a high price, the number of people wanting to sell may increase.
“News released does not always equal a rise”
For example, suppose positive news is announced by a company.
The next morning, it gaps up significantly.
What you want to be careful about here is
to what extent that news has already been priced into the opening price
.
The news is certainly positive.
However,
There may be people who say, “I want to buy if it’s up about 3%.”
But that doesn’t necessarily mean there are enough people who say,
“I want to buy even if it’s up 15%.”
It is not guaranteed that there are enough people who would say that.
If it starts too high and there are more people wanting to take profits than new buyers, it may become a ‘Yoriten’ (opening high, then falling).
Check the Gap Up (GU) rate
When considering a ‘Yoriten’, you want to check
how much it has gapped up from the previous day’s closing price.
is.
For example,
Previous day’s close: 3,000 yen
Opening price: 3,030 yen
is about +1%.
On the other hand,
Opening price: 3,450 yen
is +15%.
Of course, just because it’s +15% doesn’t mean it will definitely become a ‘Yoriten’.
However, the larger the gap up, the greater the unrealized gains for those who held the stock from the previous day.
Therefore, you should also consider the possibility of profit-taking selling.
Look at the high price immediately after the opening
Explained in the previous article,
the high and low prices immediately after the opening
can also be used here.
For example,
opening price 3,300 yen
first 5-minute candle high 3,350 yen
let’s assume that was the case.
After that,
3,300 yen
↓
3,250 yen
↓
3,300 yen
↓
3,320 yen
it recovered to.
However, it cannot break through 3,350 yen.
It falls to 3,250 yen again.
In this case,
you can see that the high price set immediately after the opening is acting as resistance
is understood.
Watching whether it breaks the opening price
When looking at a ‘Yoriten’, I also consider the opening price to be important.
For example,
opening at 3,300 yen
↓
Rose to 3,350 yen
↓
3,320 yen
↓
3,300 yen
returned to this level.
Can it maintain the opening price here?
Or will it break through
3,290 yen
3,270 yen
and continue to fall?
If it breaks below the opening price after a gap up,
many of those who bought after the opening may start to see unrealized losses
there is a possibility.
This can lead to an increase in selling.
Watch to see if it breaks below the VWAP
As some time passes after the opening, the VWAP also becomes important.
For example,
Significant gap up
↓
High price formation
↓
Falling below the opening price
↓
Falling below VWAP
is the sequence.
Furthermore,
rebounding to VWAP
↓
unable to break through
↓
falling again
suggests that selling on the rebound is occurring.
When determining a ‘Yoriten’ (opening high),
not only ‘dropped from the high’
but also,
check whether important price levels like the opening price or VWAP are being maintained.
Check the volume.
Looking at volume
The period immediately after the opening is when volume tends to be high.
For example,
Significant gap up
↓
High trading volume in the first 5-minute candle
↓
Upper wick
↓
Bearish candle in the next 5-minute interval
This is the typical scenario.
Although a large volume of trades occurred at a high price range, the price could not be maintained afterward.
There is a possibility that profit-taking selling is occurring in the high price zone.
However,
high volume does not always equal a ‘Yoriten’ (opening peak).
It is not.
There are also stocks that continue to hit new highs after high trading volume.
What is important is the price movement afterthe volume occurs.
Look at the upper wick
Sometimes a large upper wick forms immediately after the opening.
For example,
Opening price 3,300 yen
High price 3,450 yen
5-minute chart closing price: 3,320 yen.
Although it was bought up to 3,450 yen once, it could not maintain that price and was pushed back down to 3,320 yen.
In this case,
selling pressure was strong near the high
can be seen.
Will it be able to break through 3,450 yen again after that?
Or will it continue to hit new lows?
I will check this.
Comparing with the Nikkei 225
In day trading, I place importance on comparing with the market sentiment.
This is also very important for ‘Yoriten’ (opening high, then falling).
For example,
An individual stock gaps up significantly
However, the Nikkei 225 plunges after the opening.
In this case, the individual stock, which was initially strong, may also be dragged down by the index.
Conversely,
An individual stock falls once
However, the Nikkei 225 rises sharply
↓
The individual stock also rebounds
There are also times when that happens.
Therefore, it is important not to look only at individual stocks and
conclude that it is a “confirmed Yoriten”.
It is important not to think that.
Look at the sector as well
If it is a semiconductor stock,
Tokyo Electron,
Advantest,
Disco,
and other stocks in the same sector may move at the same time.
For example, is only the semiconductor stock you are monitoring falling?
Are semiconductor stocks as a whole being sold off from the opening?
The meaning changes depending on this.
Individual stocks, sectors, and indices
Comparing these three makes it easier to judge whether it is weakness specific to that stock or weakness in the market as a whole.
It may also move in the direction of filling the gap
The “gap filling” explained in the previous article and Yoriten are themes that go well together.
For example,
Previous day’s closing price 3,000 yen
Next day’s opening price 3,300 yen.
It becomes a ‘Yoriten’ (opening high),
3,250 yen
↓
3,150 yen
↓
3,050 yen
and falls.
It is approaching the previous day’s price range.
In other words,
Large gap up
→ Yoriten
→ Direction of filling the gap
is the price movement.
Sometimes it rebounds from a Yoriten
This point is extremely important.
Just because it fell in the morning,
it does not necessarily mean it will fall all day long.
It is not guaranteed.
For example,
opens at 3,300 yen
↓
falls to 3,150 yen
↓
Nikkei average rebounds
↓
3,250 yen
↓
3,350 yen
and may reverse.
If it eventually breaks the morning high, it is not ultimately a ‘Yoriten’.
At 9:10 AM,
it just looked like ‘a Yoriten-like movement’
.
Do not jump to conclusions about a Yoriten
In real-time day trading, the day’s high is only confirmed after trading ends.
In other words, in the morning,
you cannot definitively judge that ‘today is a Yoriten’
.
What you can do is
judge that ‘it is currently showing a Yoriten-type price movement’
.
After that,
if it breaks the high, you need to revise your scenario.
5 points to check for a Yoriten-type movement
(1) Gap-up rate
How much higher did it start from the previous day’s closing price?
2. High price immediately after the opening
Whether it can break through the initial high price again.
3. Opening price
Whether it can maintain the opening price after a gap up.
4. VWAP
Whether it can recover after falling below the VWAP.
5. Market sentiment
Whether the Nikkei Stock Average and the same sector are also falling.
Summary
A ‘Yoriten’ generally refers to
a price movement where the stock hits its high for the day near the opening and then declines
.
Especially for stocks that have gapped up significantly,
profit-taking by investors who held from the previous day,
an excessively high opening price,
and worsening market sentiment
can lead to selling after the opening.
However,
a gap up does not always mean a ‘Yoriten’
.
In day trading, I check in the following order:
Gap-up rate
→ Initial high
→ Opening price
→ VWAP
→ Trading volume
→ Market sentiment
And the most important thing is,
not to trade based on the prediction that ‘it will be a Yoriten,’ but to confirm whether the price action is actually following a Yoriten pattern.
Even if a stock falls once in the morning, it may subsequently rebound and break its high.
If the market movement changes, change your scenario as well.
This mindset is crucial for day trading at the market open.
For those who want to learn more about day trading
On YouTube, I conduct a day trading live stream every morning from 8:30 AM.
While watching the actual market, I explain indices like the Nikkei 225, as well as decisions on entries, profit-taking, and exits in real-time.
▶ Click here for YouTube
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For those who want to learn in more detail
In the YouTube membership, I release content that cannot be fully covered in regular videos or live streams through exclusive videos.
Past videos and live streams are also moved to members-only status after a certain period has passed since their release.
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For those who want to practice day trading with a game
I believe that day trading is not just about memorizing knowledge, but also about repeatedly making decisions such as ‘buy, sell, wait, or exit’ while watching the market.
Therefore, I have released a day trading game where you can practice the concepts of indices, market conditions, and supply and demand that I prioritize in my actual trading.
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※ This article is provided for the purpose of learning knowledge and concepts related to investment, and does not recommend the buying or selling of specific stocks or financial products. Investment carries the risk of loss, including the loss of principal. Please make actual investment decisions based on your own judgment and responsibility.
