GAP ANALYSIS AND ITS TYPES

A gap represents an area where no trading takes place.Four types of gaps:

1. Area gap – Appears between demand and supply zone with low volume and filled in near term.

2. Breakout gap – Appears only when price gives breakout from its trading range with high volume and may not be filled in near term.

3. Runaway gap – Appears after the breakout and while moving in the trend ; High close ; Volume will be distributed.Area gap may not be filled in near term.

4. Exhaustion Gap – Appears after a trending zone seems to be a Runway gap, but if it get filled on a same day; low close and high volume.