GAPS ; are places or area on the chart where no trading has taken place.

Why a GAP is formed ?

A gap is normally formed due to overnight development either In the local or global
markets.Depending on the development the stock may be forced to open higher or
lower on the next day.
Types of GAPS.
1) Upward Gaps.It is also called as upward or rising Gap.
When Todays low is greater than Yesterdays high then an upward gap has formed .
It shows unfulfilled demand and hence will act as a support.
Leave 10 llines for Diagram.
Downward Gap.
It is also known as Falling or bearish Gap. When Todays high is lower than
yesterdays low then a downward gap is formed.This gap will have a pending supply
and hence act as resistence.
Please note when prices open higher as compared to previous day close then we
have a GAP UP opening.A gap up opening need not translate into a upward
Gap.Similarly a gap down opening need not translate into a downward gap.
In candle stick analysis GAPS are referred to as windows.
A gap which has been formed on a higher time frame will be more stronger and
relevant.A weekly gap will be more powerful than a as compared to daily gap which
in turn will be more powerful than intra day GAP.
Types of GAPS.
COMMON GAP. Is also known as a congestion or area gap.It gets filled immediately
or within few trading sessions. and hence has little relevance.Volume need not be
high..
BREAKAWAY GAP.
It marks the beginning of a new rally .The volume should be high It normally occurs
after a consolidation is over and majority of the times it is not filled until the target
is achieved or trend is reversed.
MEASURING GAP
Also known as runaway gap .It occurs in the middle of a rally and helps to find out
the target for the rally. Volume should be high.

EHHAUSTION GAP.
It occurs at the end of a rally . It tells us that the current trend has exhausted
.Volume will be high .Usually this is the first gap which will be filled.Normally a
bearish candlestick pattern is formed where the prices reverses.