Gap Analysis

In technical analysis, the GAP explains about the difference in the prices of stocks between a trading period in relation to the previous trading period. For instance, the closing prices of shares for today stands at Rs.20 and the opening prices of the subsequent day is quoted at Rs.30 and closes well above the previous day trading range, and there is an empty space in the prices between those two trading periods, it is called as GAP. It can be classified into four categories namely, the area gap, breakout gap, runaway gap and the exhaustion gap.