Gap

A gap in technical analysis occurs when a security's opening price on a given day is significantly higher or lower than the previous session's closing price, leaving an empty space on the price chart with no trades in that price range. Gaps are caused by overnight news—earnings results, regulatory announcements, global market moves—that shift sentiment before the Indian market opens at 9:15 AM. There are four types: common gaps (quickly filled, low significance), breakaway gaps (mark the start of a new trend), runaway gaps (occur mid-trend confirming momentum), and exhaustion gaps (occur near a trend's end, signalling reversal). Gaps often act as future support or resistance levels.