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The GAP is formed when there is a large-enough difference in the opening price with reference to the closing price of the previous day
Area gap – will appear inside the trading range(Non trending area) . It may be filled in near term. If gap not filled which indicates the weakness of counter party. The volume during the Gap day is generally low.
Breakout gap – will appear only when price give breakout from its trading range. Area Gap may not be filled in near term. The volume during the gap day should be high.
Runaway gap – Post breakout, the runaway scenario take place, its indicated the sellers buy back the shares. This gap appear inside the trending zone, it may not be filled in near term. The close should be at its day’s high during Runaway gap. The volume is distributed evenly during the day.
Exhaustion gap – The gap appear after the trending zone seems to be a Runaway gap but if it get filled on a same Day then it can be considered to be Exhaustion gap. The close should be at day’s low during runaway gap. The volume should be very high during the day to terminate the existing trend.
Since the market cap is low, they are easily manipulated by operators who lure unsuspecting investors and dump worthless shares on them.
If a stock isn’t priced well, it could be because the company is dying, and a dying company isn’t going to pay out.
Penny stocks are cheap because no one wants them. That means when you’re ready to sell, you probably won’t find any buyers.
1. Indian stock market collapsed after Harshad Mehta scam surfaced. Traders/investors didn’t trust stock market and it was BSE who lost its credibility. NSE was a new entrant, a fresh one. No judgments were attached to NSE, thus it was the only choice for investors
2. While BSE worked as a black-box, NSE brought transparency and rebuilt the trust of investors in the stock market.
3. NSE eliminated the monopoly of brokers in the stock market and allowed every eligible trader/investor to buy-sell directly.
4. NSE depository NSDL removed all the problems attached to a physical certificate. No more physical papers, no more worries.
5. Stock market runs on retail traders, who place trades of small turnover. Thus low charges of NSE for lower turnover trades are obviously better.
6. NSE stocks provide more liquidity than BSE, thus a better choice for investors.
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