Gaps and Gap Analysis


By March 17, 2016 December 1st, 2018 No Comments

Back to “Technical Analysis Guide”

A Quick Change In The Market

Despite what you may have heard, the market these days depends less on hunches and speculation about supply and demand, and more on examinations of the past performance of a particular stock to help predict how that security might behave in the future. Learning how to read technical analysis charts and interpret signals like the gap will make it easier to make smart decisions with your money.

Those that are just now starting to look at stock chart patterns might be familiar with the up and downs of the market, but what about when there is a gap in the trading? Usually these spaces indicate that no trading has happened during that period of time, and are typically the most visible in daily charts where the space between one day and the next presents the perfect opportunity for a break in the trading pattern to occur.

There are many different factors that can work together to create a gap in the market, including selling pressure and regular buying, earnings announcements, or a change in an analyst’s outlook New releases that are leaked to the media can also have a psychological impact on those responsible for stock trading.