I’ve shown in the past using numerous studies that a large gap to a new high has a tendency to pull back during the day. Below is a study that represents some of what I was looking at this morning.
The stats here appear quite bearish. But below is the equity curve.
It appears over the last few years this setup has failed to deliver consistent downside movement. I looked at this a number of ways this morning and most of the equity curves looked like this. So be careful getting overcondfident trying to short this gap.