GAP in technical analysis, Four Types of GAP,
– Area Gap.
– Breakout Gap.
– Runaway Gap.
– Exhaustion Gap.
- : GAP indicates the Moving of Strength or lack in Strength. It helps us to locate the phase of trend. It appears due to different in trading range is called gap analysis.
- : The Moment when we spot a GAP try to qualify it with Four gaps they are - AREA GAP : It occurs in trading area. - BREAKOUT GAP : It occurs above the trading area and it shows the strength. - RUNAWAY GAP : It occurs at trending area and it forces sellers to buy what they have. - EXHAUSTION GAP : It occurs at trending area and close the gap in same day.
- : The gaps are appeared dude to good or bad news, may be some important events which affect the market. Overnight risk occurs after closing of market time where imports even take place or Important news affect the market price.
- : Area gap appears inside non-trending area. - The Candlestick are used. - Appears inside trading area. - Gap will be filled. - Volume will be Low.
- : Breakout Gap appears during the beginning of New trend. - It appears above the Trading area. - Gap will not be Filled. - Volume will be High.
- : Runaway gap appears on Trending area. - It forms above the trading range. - It forces the sellers to buy their shares. - The day’s close should be high. - Volume is High.
- : Exhaustion gap appears at trending zone it looks like Runaway Gap, but if it closed the gap same day it is considered as exhaustion gap. - The Day’s close should be low. - Volume should be very High.