Company: Ambuja Cement Limited
Chart type: Candlestick.
The price Breakout gaps happens while the price trend is moving out from current pattern and starts new trend at different level creating gap between closing price of current trade session and new open price during the following day.
Enclosed is the Chart illustrating Breakout Gap which filled subsequently.
· It may be seen initially trend is moving sideways over one month.
· Subsequently, due to certain development in the market the price has jumped away from sideways (upwards) breaking the regular path supported with High volume.
· The jump up reflects the directional strength or intensity. Generally, It is expected trend to continue in the same direction.
· However, in this case, price refuses move ahead during subsequent trading session. Instead, trend started moving little sideways started moving downward covering the GAP which was already created. This phenomenon shows that overnight market development had little impact and also possibly due to weak demand the price drops back.
Hence, though breakout gap occurs, it looses its strength and filled the GAP.
