I should have said it is more likely a breakaway gap ......

I should have said it is more likely a breakaway gap ...

Breakaway Gaps
Assets prices move in ranges or trends. Ranges are when then the price is moving up and down, but little progress is made in either direction. Trends occur when the price is making progress either up or down over multiple price swings. When a price moves from ranging to trending, it will sometimes start that trend with a breakaway gap.

A breakaway gap shows decisive movement out of a range or other chart pattern. These types of gaps are commonly associated with heavy volume, showing the strong conviction of the breakaway. These types of gaps are most commonly associated with major news events, or earnings announcements in individual stocks, which rapidly change investor sentiment.

Breakaway gaps don't tend to fill, or at least not for a long time. Instead, the price tends to run in the same direction as the breakway for some time after. The times when breakaway gaps do fill, the breakout direction usually prevails. The price may move back to where the gap started, fooling traders into thinking the gap was a false breakout, but then the price usually keeps moving in the breakaway direction.

Breakways gaps can occur to the upside or downside. The analytical insight is the same: expect further movement in that breakaway direction.



Read more: Analyzing Chart Patterns: Gaps https://www.investopedia.com/university/charts/charts8.asp#ixzz5NdJN93Q7
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