ABSTRACT
A gap, in the language of the chart technician, represents a price range at which no shares changed hands. The gaps may be divided into four classes: Common or Area Gaps, Breakout Gaps, Continuation or Runaway Gaps, and Exhaustion Gaps. The Breakaway type of gap also appears in connection with a Price Congestion Formation, but it develops at the completion of the formation in the breakaway move. The Breakout Gap signals the start of a move; the Runaway Gap marks its rapid continuation at or near its halfway point, and the Exhaustion Gap comes at the end. Exhaustion Gaps, like Runaway Gaps, are associated with rapid, extensive advances or declines. An Island Reversal might be described as a compact trading range separated from the move that led to it by an Exhaustion Gap and from the move in the opposite direction that follows it by a Breakaway Gap.
