Well, the post title says it all. The concepts are useful for day traders, but then again, trading concepts can be educative for all traders. So here I go.
Once a market opens gap up, there are three possibilities for the day's action: 1. The market continues to move higher. 2. The open is roughly the high of the day and the market then makes a bearish reversal and, 3. The market drifts throughout the day around the open.
Let us start with one number: the Average True Range for Nifty futures. Currently, this is 75. This means, on an average day, futures move 75 points between high and low. Once we have this number, our task becomes easier. With a gap open, we add 75 to Friday's close (6034) to get the likely high point, which is: 75+6034 = 6109. Remember this is the average, but that's what we have to work with.
If the gap open takes the open near 6109 then scenario 2 is likely. If the open is near Friday's high then scenario 1 is possible. If the open is somewhere in the middle of Friday's high and 6109 then scenario 3 is possible. All of this is anticipation. But doing mental scenarios makes life easy.