The area gap analysis is done to find out the strength of the trends irrespective of whether it is upwards or downwards. This gap is anticipated to be filled in the near term, but may also end up getting unfilled due to either aggressive buying or aggressive selling of the stock. The formation of the Area Gap can be confirmed subject to the fulfillment of the following conditions :
1. Area Gap will appear inside the trading range.
2. Area Gap may be filled in the near term.
3. The volume during the gap day is generally low.
Therefore, in line with the above principles it can be reaffirmed that the formation of Area Gap has formed during the period of October 2017. It can be observed that firstly there is a downward trend in the prices of the stock only later to become sideward, and the area gap appears within the trading range with good volume of stocks traded during the gap up day. It can also be noticed that the gap later gets filled during the day showing the sideward movement again.
