In the above shown chart the concept of Breakout Gap has been applied on the company ‘Bharti Airtel’ during the month of October 2017, wherein there appears to be a breakout from the current sideways trend which reflect stiff competition between the buyers and sellers. A Breakout gap appears only when the following conditions are fulfilled :
1. The Breakout Gap appears only when the price gives breakout from it’s trading range.
2. The Area Gap may not be filled in the near term.
3. The volume during the Gap day should be high.
In line with the above principles, it can be confirmed that the theory of Breakout Gap has been formed during the above mentioned period. Since there is a bullish breakout, the position to be adopted by the trader is long. Also, the gap which has formed does not appear to be filled in the short term and hence remains unfilled.
