A price gap is a discontinuity in a security's price chart where the opening price of a trading session is significantly higher or lower than the closing price of the preceding session, leaving a visible gap with no trades in between. Gaps occur due to overnight news—such as earnings announcements, regulatory developments, or global market events—that shift sentiment before Indian markets open. Technical analysts categorise gaps as common gaps (filled quickly), breakaway gaps (signalling the start of a new trend), runaway gaps (occurring mid-trend), and exhaustion gaps (occurring near the end of a trend). Gaps often act as future support or resistance levels.
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