Runaway Gap

Runaway Gap is a gap on a price chart that occurs during strong bull or bear movements characterized by an abrupt change in price.

Runaway Gap

Runaway Gap is a gap on a price chart that occurs during strong bull or bear movements characterized by an abrupt change in price.

 


Runaway Gap

An upside runaway gap will often occur in a momentum stock as buy orders dwarf sell orders overnight due to traders rushing to buy the stock.  This causes the stock to open significantly higher than where it closed the previous day.

A downside runaway gap will often occur in a stock which is moving swiftly lower, as the selling intensifies and owners flood the market with sell orders overnight in an attempt to exit their positions.


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