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Gap Analysis

The gap analysis is very important part of the technical analysis. Every day opening of the stock will have a gap with the previous day close. This gap will determine the market flow throughout that day. The gap are classified into four types: Area gap, Breakout gap, Runaway gap and Exhaustion gap. These four gap behaves in different ways and has its own characteristic. Knowing the behaviour of gaps helps a trader to gain from the market movement.

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