Gap
A price jump between one period's close and the next period's open, leaving a void on the chart with no trades executed.
A gap is an area on the chart where price jumps discontinuously — no shares exchanged hands in that price range. Gaps occur when after-hours news, earnings, or macro events dramatically shift sentiment before the next open.
Common gap types:
- Common gap: minor gap within a range, typically filled quickly.
- Breakaway gap: marks the start of a new trend from a consolidation — often not filled.
- Runaway (continuation) gap: occurs mid-trend on expanding volume — signals trend acceleration.
- Exhaustion gap: near the end of a trend; price often reverses to fill it.
Example
A biotech stock closes at $42 and opens at $56 after FDA approval overnight. The gap from $42–56 is a breakaway gap. If the stock holds above $56 for several sessions, that open gap becomes a support zone.
Related Terms
Breakout
Price moving decisively above a key resistance level or the top of a range, often on expanding volume.
BeginnerConsolidation
A period of tight, low-volatility price action — typically a pause within a trend before the next directional move.
BeginnerSupport
A price level where buying pressure has historically halted or reversed a downward move.
BeginnerTrend
The persistent directional bias of price over a defined timeframe — up, down, or sideways.
Beginner