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by Jason K. Hutson
A breakaway gap usually occurs at the beginning of a significant price pattern. You can expect to find them when a security is breaking out of a trading range or when it is breaking a trendline.
Position: N/A
Jason K. Hutson
Traders.com Staff Writer. Enjoys trendlines, support and resistance, moving averages, RSI, MACD, ADX, Bollinger bands, parabolic SAR, chart formations, and volume analysis.
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BREAKAWAY GAP
Breakaway Gap
05/08/00 03:01:09 PMby Jason K. Hutson
A breakaway gap usually occurs at the beginning of a significant price pattern. You can expect to find them when a security is breaking out of a trading range or when it is breaking a trendline.
Position: N/A
| Breakaway gaps are accompanied by a substantial increase in volume. Since they indicate the beginning of a price pattern, the probability of the gap fading is low. The resistance level that was broken now becomes the support level. |
| The price movement initiated by the breakaway gap will remain strong if prices remain above the new support level. If, however, they drift below it, you can expect a weakness in the market. |
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Traders.com Staff Writer. Enjoys trendlines, support and resistance, moving averages, RSI, MACD, ADX, Bollinger bands, parabolic SAR, chart formations, and volume analysis.
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Date: 05/28/04Rank: 1Comment:
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