Gap - breakaway gap


Gaping in price is an immediate price change from a low price to a high price and from high price to a low price that is reflected in a chart as an area where no trades took place between the close of the previous bar and open of the subsequent bar.

Breakaway gaps occur at the end of a price pattern and signal the beginning of a new trend. A breakaway gap occurs when the price gaps above a support or resistance area, like those established during a trading range. When the price breaks out of a well-established trading range via a gap, that is a breakaway gap. A breakaway gap could also occur out of another type of chart pattern, such as a triangle, wedge, cup and handle, rounded bottom or top, or head and shoulders pattern.

Breakaway gap from symmetrical triangle