Gap Up

What is the definition of Gap Up?

A Gap Up is when a stock opens at a higher level than the previous day's high. For example, if the previous day's high was 500, and the stock opened at 505, there would have been a 5 point gap up. This is considered a bullish signal.

This is also known as a Full Gap Up (as opposed to a Partial Gap Up which is when the stock just opens above the previous day's close).


Stockopedia explains Gap Up...

Gaps are areas on a share price chart where the price of a stock moves sharply up or down, with little or no trading in between. Opening gaps can be caused by news releases (for example, if a company's earnings are much higher than expected) or events that happen while the market is closed, or technical factors (e.g. traders placing their orders, before the market opens).

You can read more about Gap Trading Strategies here.



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