price gap(redirected from Breakaway Gaps)
A term used when the price of a stock rockets or dives in a direction away from its last price range, such as a stock with a trading range of $10-$12 that closes at $12 and climbs to $14 the next day.
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In technical analysis, a break on a chart representing a sudden and large price movement accompanied by high trading volume. Generally speaking, charts do not show price gaps because price movements, even when large, occur smoothly enough to not require a break in the chart. Price gaps may occur, for example, when the price of a security suddenly doubles or halves. As with many charting terms, it may be bullish or bearish; a sudden movement upward is a bullish price gap, while a sudden movement downward is bearish. It is also called a breakaway gap.
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Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.