GAP in technical analysis is the gap between the previous days high/low price and next day low/high price.
It indicates the strength of the trading.
Depending on the area where the GAP is formed due to trading difference, it can be named as Area/Common, Breakout, Run-Away or Exhaustion.
Hi,
Your first Question: Negative Breakout with GREEN Hammer. What does it convey? Hammer man candlestick express the reversal pattern because it has a characteristic that the day of hammer man pattern in which the sellers were initially in charge but yet the buyers were capable to reverse that control and drive prices back up to close near the high for the day, as a form that the short body at the top of the candle. Volume should be high during the hammer day.
Your second question: How to combine candle stick/Dow with GAP analysis? Dow theory uses trend analysis to determine which way the market is headed. There are 3 trends/movements of the market that are: Primary trend, secondary trend and minor trend. secondary and minor trend can be analysed by using candlestick pattern and gap analysis which shows the demand and supply effectively.
Thanks Naresh for your explanation.