Exhaustion Gap Chart Patterns

In this blog Global Market Astro briefs about a significant charts pattern observed in daily stock market charts. We have explained the exhaustion gap with illustrations for easy understanding of stock market charts and in making stock market trend analysis.

EXHAUSTION GAP

It is the last gap formed at the end of a trend and it signals a negative sign that the trend is about to reverse. This generally occurs at the last thrusts of a trend marked as hype or panic and it can also be a point when weaker traders start to move in or out. These exhaustion gaps are usually considered as either “a can’t-miss opportunity” or “avoid at all costs”.

To identify an exhaustion gap or the last large move of the trend, the gap should be marked with huge volume. The strength of the signal also gets increased when it appears after the stock has made a substantial move.

As the exhaustion gap signals a trend reversal, the gap is expected to fill. After the completion of exhaustion gap, the price will move sideways before moving converse to the prior trend. Once the price fills the gap, the pattern gets completed and signals a trend reversal.

Source : https://www.globalmarketastro.com/blog/exhaustion-gap-chart-patterns/

Runway Or Measuring Gap - Chart Pattern

In this blog, Global Market Astro briefs about the runaway gap or measuring gap. The runaway gap is a type of gap chart pattern used in stock market trend forecasts.

RUNAWAY GAP (OR) MEASURING GAP

A runaway gap is found around the middle of a trend, usually when the price has already started a strong move. It is a strong healthy signal as the trend will continue as it indicates continues, even raising, interest in the stock.

Once the security makes a strong move, the traders waiting on the side-line for better entry or exit may decide it not coming and if they wait further, will be missing the trade. This increased buying or selling creates runaway gap and continuation of the trend. Volume is not much important in runaway gap as in breakaway gap, but should be marked with average volume. If the volume is too extreme, it happens to be an exhaustion gap signalling the end of a trend.

The runaway gap forms support or resistance in similar manner as the breakaway gap. Also, the measuring gap does not frequently fill, and there’s cause for concern if the price breaches through the support or resistance, as it is a sign that the trend is weakening – and could even signal that this is an exhaustion gap and not a runaway gap.

source : https://www.globalmarketastro.com/blog/gaps-runway-measuring-gap/

Common and Breakaway Gaps In Charts

Global Market Astro has tried to explain the types of gap chart patterns used in stock market forecasts and in trend analysis in this blog. Let’s stream through the explanation and illustration for Common and breakaway gap chart patterns.

COMMON GAP

The common gap often occurs during the price movement of a security. It is not much significant like other gaps but is always worth to note down. These gaps occur when the security trades in a range and they will be smaller in terms of gap’s price movements. They occur as a result of general events such as low volume trading days or due to an announcement of stock split. These gaps get filled quickly and moves back to the pre-gap price range.

BREAKAWAY GAP

The breakaway gap generally occurs at the beginning of a market move after the security has traded in a consolidation pattern which happens when the price is non-trending within a bound range. It is referred as breakaway gap as it moves the security from a non-trending to a trending pattern.The breakaway gap is a good sign that the new trend has started.

A strong breakaway gap out of a consolidation period is taken to be much stronger than a non-gap move out. The gap indicates a large increase in sentiment in the direction of the gap, which will probably last for some time period, resulting to an extended move.

The strength of this gap and the accuracy levels of its signal can be confirmed by considering the volume during the gap. The larger the volume out of the gap, the more likely the security will continue in the direction of the gap, also reduces the chances of it being filled.

While the breakaway gap generally doesn’t fill like the common gap, it will in some cases. The gap will often provide support or resistance for the resulting move. For an upward breakaway gap, the lowest point of the second candlestick provides support. A downward breakaway gap provides resistance for a move back up at the maximum price in the second candlestick.

source : https://www.globalmarketastro.com/blog/common-and-breakaway-gaps-in-charts/

Chart patterns – Gaps and its types

In this blog, Global Market Astro explains the commonly observed chart pattern- the gap and its types in the upcoming blogs. Hope it gives a greater understanding for  the readers and helps them in making stock market forecasts.

GAP

A gap is an empty space generally occurring in a chart between one trading period and its previous trading period. These gaps usually form as a result of an important and material event that suddenly affects the price of the security such as earnings surprise or a merger agreement.

The gap in price movements are observed in bar and candlestick charts but not on line charts or point and figure charts. This is due to the reason that each and every point is connected in line, point and figure charts

These gaps occur in places where there is large enough variation in the opening price of a trading period where that price and the successive price movements do not fall within the range of the previous trading period. If suppose the price of a stock is trading at $30 and suddenly jumps to $37 in the next trading period, a large gap is formed over there.

There are four major types of gaps

• Common gap
• Breakaway gap
• Runaway gap
• Exhaustion gap
• Island reversal gap

Though these gaps are similar in structure, they differ only by the location in which they occur in the trend and the how they mean to the chartists in stock market trend analysis.

Source : https://www.globalmarketastro.com/blog/chart-patterns-gap-and-its-types/