The probability of this happening on any given day is around 70%, depending on the market. A 'downgap' would mean today opens at, for example, 1140, and the speculator buys the market at the open expecting the 'downgap to close'.

This means for example that if the S&P 500 closed the day before at 1150 (16:15 EST) and opens today at 1160 (09:30 EST), they will short the market expecting this 'upgap' to close. Some market speculators 'Fade' the gap on the opening of a market. Normally, noticeable heavy volume accompanies the arrival of exhaustion gap. Keeping an eye on the volume can help to find the clue between measuring gap and exhaustion gap. It is quite possible that confusion between measuring gap and exhaustion gap can cause an investor to position himself incorrectly and to miss significant gains during the last half of a major uptrend. Runaway gaps are not normally filled for a considerable period of time. It can be used to measure roughly how much further ahead a move will go. It is not associated with the congestion area, it is more likely to occur approximately in the middle of rapid advance or decline. Measuring Gap – also known as a runaway gap, formed usually in the half way of a price move.An Exhaustion gap should not be read as a major reversal. When it is formed at the top with heavy volume, there is significant chance that the market is exhausted and prevailing trend is at halt which is ordinarily followed by some other area pattern development. A reversal day can easily help to differentiate between the Measuring gap and the Exhaustion gap. These gaps are associated with a rapid, straight-line advance or decline. Exhaustion gap – signals the end of a move.If the gap is filled, they offer little forecasting significance. Usually, the price moves back or goes up in order to fill the gaps in the coming days. One can also see them in price congestion area. Instead, the price activity has been oscillating between a relatively narrow range without forming any distinct trends'). Common gap – also known as an area gap, pattern gap, or temporary gap, tend to occur when trading is bound between support and resistance level on a short span of time and market price is moving sideways ('where the price trend.has been experiencing neither an uptrend nor a downtrend.

When the price is breaking away on a low volume, there is a possibility that the gap will be filled before prices resume their trend. If it is heavy after the gap is formed then there is a good chance that market does not return to fill the gap. When the price is breaking away from a triangle (Ascending or Descending) with a gap then it can be implied that change in sentiment is strong and coming move will be powerful. Breakaway gap – occurs when prices break away from an area of congestion.Each type has its own distinctive implication so it is important to be able to distinguish between them. There are four types of gaps, excluding the gap that occurs as a result of a stock going ex-dividend.

Fill the gap stocks