GAPS OCCUR IN A TREND WHEN NO TRADING TAKES PLACE WITHIN A PARTICULAR PRICE RANGE.IT MAY BE DUE TO SOME POSITIVE OR NEGATIVE NEWS ABOUT THE MARKET.
GAP UP OPENING INDICATES BUYERS ENTHUSISASM (ie) BUYERS ARE WILLING TO BUY THE STOCKS AT A PRICE HIGHER THAN THE PREVIOUS DAYS CLOSE..SO THE NEXT DAY STOCK OPENS DIRECTLY ABOVE THE PREVIOUS DAYS CLOSE.THIS IS A BULLISH SENTIMENT.
GAP DOWN OPENING SHOWS THE ENTHUSIASM OF SELLERS(ie) THE SELLERS WANT TO SELL AWAY THE STOCK AT ANY PRICE EVEN LOWER THAN THE PREVIOUS DAYS CLOSE.IT PORTRAYS BEARISH SENTIMENT
FOUR TYPES OF GAPS ARE AREA GAP,RUNAWAY GAP,BREAKOUT GAP,EXHAUSTION GAP