1. Basic of GAP analysis and why it is important to know.
2.Types of GAP name and their characteristics.

  • : GAP in technical analysis indicates strength of either buyer or seller. These gap appears due to overnight or even in market time if there is some announcement or may be due to global cues gap appears which is nothing but it gives support either to buyer or seller.
  • : GAP are named as area gap, breakout gap, runaway gap and exhaustion gap.
  • : These gap appears due to overnight or even in market time if there is some big announcement to happen or may be due to global cues gap appears which is nothing but it gives support either to buyer or seller. So never put an after market order which can be risky.
  • : If there is continuation of trend going on and then consolidation started then suddenly due to some global cues or announcement there gap appears in non trending zone where both buyer and seller were having equal strength then that GAP is called Area Gap. This gap has get filled in near terms then only it can will qualify as Area Gap and volume has to be low.
  • : If there is continuation of trend going on either bullish or bearish then suddenly a GAP appears and opens way above the previous day closing price and close above previous closing price with higher volume , then it is called Breakout GAP. It should happen in trending zone not after sideway trend . The GAP should not get filled in the near term then only it will qualify as Breakout GAP.
  • : If there is continuation of trend going on either bullish or bearish then suddenly Breakout GAP appears which supports the strength of buyers or suppliers and again due to more demand or supply again a GAP appears and opens way above the previous day closing price and close above previous closing price with higher volume , then it is called Runaway GAP because it may due to global cues supporting them or more demand or supply happening . It should happen in trending zone .The GAP should not get filled in the near term then only it will qualify as Runaway GAP.
  • : If there is continuation of trend going on either bullish or bearish then suddenly GAP appears and opens way above the previous day closing price and due to some reason that gap gets filled in the same day and closes below the previous day closing price with high volume which indicates trend reversal about to happen. It is little difficult because those who don't understand candlestick analysis or demand and supply it will be difficult for them to identify.
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