Gap Analysis

Gap indicates the strength. it appears due to difference in trading range. Gaps are areas on a chart where the price of a stock (or another financial instrument) moves sharply up or down, with little or no trading in between.Gaps are named based upon where they occur whether occurs in trending area or non trending area. Various types of Gaps are as under. 1. Area Gap 2. Breakout Gap 3. Runaway Gap 4. Exhaustion Gap.when the opening price is much higher than the previous days closing a gap appears in chart.this happens mainly due to major positive sentiments in the US markets or Asian markets.,or due to any positive news for that company known after the closing.