A gap is defined as an unfilled space or interval. On a technical analysis chart, a gap represents an area where no trading takes place. Conversely, in a downward trend, a gap occurs when the lowest price of any one day is higher than the highest price of the next day
There are four types of gaps: common, breakaway, runaway, and exhaustion, as well as a gap pattern called an island reversal. Common Gaps. Common gaps provide no significant analytical insight, and are regular occurrences. Breakaway Gaps. Assets prices move in ranges or trends. Runaway Gaps. Exhaustion Gaps
A gap is defined as a price level on a chart where no trading occurred. When you are looking at gaps on a stock chart, the most important thing that you has already occurred, these are amateurs buying the stock – look to short.