I.
Breakaway Gaps
Breakaway gaps known as one of the interesting gaps. It occurs when the price action
is out of range of the trade or congested area. The congestion area is just a price range
where the market has been trading for a period, usually several weeks or more. The
areas near the peak of congestion are usually resistant when approached from the
bottom. Similarly, the area near the bottom of the congestion area which supported
when approached from above. To get out of this area requires market spirit, and more
buyers than sellers for a price increase or more sellers than buyers for a price drop.
Volume will increase significantly, not only from rising spirits, but also because many
holds the wrong side of the breakout and must close or sell it. It is best if the increase
does not occur until the gap occurs. This means that the new market direction is likely
to continue. Breakout points are now new support if breakout is reversed or resistance
if breakout downside. We should not be trapped in the thought that this kind of gap, if
associated with good numbers, will soon fill up. It also may take a long time.