Ramesh’s learning on Gap Analysis

GAP is the difference in the trading range in the candle stick chart. There four types of gaps namely, Area Gap, Break out gap, Runaway gap and Exhaustion gap. Area gap occurs in the non-trending zone. Usually it will get filled. If it is not filled then it might lead to breakout. Breakout gap appears only when price give breakout from its trading range. It may not be filled in near term. The volume during the gap day should be high. After having a break out, Market opens with the Gap with bullish trend. This is termed as Runaway Gap. After the runaway gap, if it gets filled on the same day it is an exhaustion gap. Very high volumes during the day.