Company : Coal India Limited, a public sector mining company.
Chart type : Candlestick.
Runaway Gap happens while trending suddenly price jumps ahead in the same direction creating a GAP which indicates enhanced momentum. One such chart is enclosed for view. The patterns’ behaviours are explained as below:
· It may be seen that the trend moving downward indicating weak demand and high selling pressure. ie., High supplies with reducing demand.
· During the progression of trend, may be due to overnight market development, Demand has reduced but selling pressure continued to catch up resulting gap down. This is supported high volume on the trading day.
Successive trades show the continued low demand impact resulting desperate offloading of stocks, pulling the price down.