Runaway Gap

A runaway gap, also called a measuring gap or continuation gap, is a price gap that occurs in the middle of a strong, established trend — well after the initial breakaway gap that initiated the trend and before any exhaustion signal. It represents a surge in market conviction as momentum accelerates, with buyers (in an uptrend) or sellers (in a downtrend) so eager to establish positions that they are willing to pay prices significantly above (or accept prices significantly below) the previous session's closing level. Runaway gaps typically occur on above-average volume and are accompanied by strong price momentum. Technical analysts use the runaway gap as a measuring tool — the distance from the start of the trend to the gap approximately equals the remaining distance the trend will travel, providing a price target. In Indian equity markets, runaway gaps are common during strong sector rallies — such as the defence sector breakout in 2022-23 or the PSU rally in 2023-24 — where multiple consecutive gap-up sessions confirmed the strength of the move.