Gap Up, Gap Down
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Gaps are situation that occur when a financial asset’s opening market price is higher than its closing price from the previous trading day.
A Trading range where there is an exhaustion gap down, then prices Trade in a narrow range, then there is a breakaway gap up. This Leaves a sort of island of prices in the middle.
Gap up
Note, on the new chart, there is a 'gap up' from the previous day's closing price.
Gap up into an objective supply (resistance) level
In a downtrend, selling short on a gap higher into supply is likely the highest probability trading opportunity there is.
Full Gap Up: Long
If a stock's opening price is greater than yesterday's high, revisit the 1-minute chart after 10:30 am and set a long (buy) stop two ticks above the high achieved in the first hour of trading.
A Gap Up forms when the low for a period (usually day) is higher than the previous period's high.
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Trading Considerations ...
A gap up above the open of the previous day's dark candle is a strong buy signal. This is especially true when the stochastics are in an oversold condition and starting to curl back up.
The gap up on the second day encourages the bulls, however the close on the second day is nearly the same as the open on the second day.
A Gap Up occurs when the open of Day 2 is greater than the close of Day 1. Contrastly, a Gap Down occurs when the open of Day 2 is less than the close of Day 1.
There is much psychology behind gaps. Gaps can act as: ...
When a gap up or down occurs in the price, traders should immediately look for an accompanying increase in volume.
Second day gap up, with the price opening higher than the prior day's close. This first gap up is unexpected and marks the breaking point with the bearish conjecture.
On the second day, the price moves up and closes higher, drawing a green candle.
Market may gap up sharply as it opens but it closes unchanged from the prior session's close during an uptrend. Such a pattern is called Bearish Meeting Lines Pattern, which is a pattern that reflects a balance between the bulls and the bears.
Likely based on 'Apple euphoria', the Nasdaq 100 opened with a strong gap up opening (of some 14 points) this morning, en route to its ninth gain in ten sessions and still at only two red closes for all of April.
Confirmation of the bullish doji star would consist of any upward movement, whether it be a gap up, an even higher close, or any type of white candlestick.
Step 8 - It is also possible for the stock to gap up on the following day due to overall market strength. If the stock gaps up and opens 5/8th higher than the previous day's close, DO NOT PANIC AND COVER RIGHT AWAY.
a gap up that does not close), followed by a larger downward candlestick (i.e. another red candlestick), that opens above the close (and possibly the open) of the second candlestick (i.e. another gap up), ...
The next day's gap up comes as a surprise to the shorts who thought they were sitting on a great position the previous day, but the stock gives some of its gap up back causing the candle to be filled in.
After an upward trend a gap upward occurs as a few buyers have orders in way higher than the trend moving price. All others pull out and stay neutral causing little price action.
A "gap up" takes place when a market/stock opens and continues to trade at higher price levels than the previous day's high. In candlestick terminology, this is referred to as a "rising window" and is bullish.
An uptrend is followed by two long white days with a gap upward between them. The third day is a black day, but one that closes the gap between the first two.
The only caveat is that we didn't get a complete gap fill after last Thursday gap up. The lower blue line marks the 100% fill. If it doesn't break up, it might break down, either way, there's a nice trade coming up.
This is evident if there is a large gap up or a higher close on the fourth day, or in the form of a white candlestick. Basically, if the price rises to a new high on the fourth day, then the bullish reversal is confirmed.
It may gap up, gap down, or open where it closed the last time. Where a stock opens can prove deceptive, especially if the stock gaps up or down significantly from the closing price. (See Opening Price) ...
In Figure 2.3 below, we see Amazon.com’s (AMZN) stock gap up when it surprised the public with better than expected earnings.
Fig 2.3 Click to Enlarge (May need to disable pop up blocker).
The broad market can gap up and hold above the opening price easily when these two forces work together. But watch out for a shakeout day when the unemployment numbers give neither side an advantage.
An occurrence in technical analysis where a stock price will gap up/down, trade higher than this price, and then gap down/up below the initial price.
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This pattern start with a long white candle (part of a uptrend), it is followed by a gap up doji and finally on the third day a black candle is formed with a gap down.
Rising Window
This the same as a gap up. Read more about gaps here.
The top 10 candlestick patterns #4 - Evening Star: Commonly regarded as a bearish reversal pattern, this three-day pattern consists of a long white body, followed by a smaller gap up candlestick, ...
Breakaway Gap A gap formed on completion of a price pattern that signals a continued move. For example, the break of a resistance level above a base formation on a gap up.
In addition to the above screeners, many trading platforms have a built in Stock Screener that can be used for intraday screening as well. I will frequently run one of mine to see what stocks are big gainers or losers for the day and ones that gap up ...
stop-limit order - a variation on the stop order; a stop-limit order will be executed only at the limit price, not higher or lower than the limit price. In contrast, a stop order will be executed at the stop price, or, should the stock gap up or ...
Also keep in mind that those traders that shorted this stock on the day of the breakdown probably put their stop loss orders above the consolidation. When the stock moved above that area, their stop loss orders were taken out - causing the gap up.
(market followers), some will do their own thing, some will spike up and down regularly, some will stop at key moving averages and some will just plough through. Some will move by 5% on average before they retrace and some by 2%. Some will gap up or ...
There is no unusual volume or price event on day [2].
Price gaps up with strong volume but Chaikin Money Flow dips - because the close is below the mid-point between the day's high and low. The gap up is ignored.
Island Reversal: A trading range where there is an exhaustion gap up, then prices trade in a narrow range for a few days, then there is a breakaway gap down. This leaves a sort of island of prices in the middle.
 See also: Gap, Trend, Pattern, Trading, Candle
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