First Global Data Ltd FGBDF

RE:food for thought: recent news = changing fundamentals

[FarmerInvestor4]

klondikekid wrote:

How to Recognize If a Trading Price Bar Gap Will Be Filled

You may hear that a gap in a trading price bar must be filled. This emphasis on filling the gap is usually nonsense uttered by people who are trying to sound worldly and wise, but really don’t know what type of gap they’re dealing with. Filling the gap means that prices return to the level they occupied before the gap. This figure illustrates filling the gap.

When a gap will be filled, and whether it will be filled at all, partly depends on the type of gap you’re dealing with:

• Breakaway gap: Sometimes the price doesn’t return to fill the gap for many months or even years — if ever. When the fundamentals of a security change dramatically, why would market participants sell it back down to the level it was before the big event? Conditions have changed permanently and so has the price of the security. If a company has invented some new must-have product, the new higher stock prices may not be the right price, but the old prices based on the old conditions aren’t right, either.

• Runaway gap or common gap: Demand for the stock is normal and not under the influence of news or changing conditions, so the gap may be filled by bargain hunters. Sometimes a gap gets filled because the chatter about “filling the gap” makes it a self-fulfilling prophecy.

https://www.dummies.com/personal-finance/investing/technical-analysis/how-to-recognize-if-a-trading-price-bar-gap-will-be-filled/


Also see:
https://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:gaps_and_gap_analysis

Hey Klondike...

Thanks for the post!  This is exactly what I was trying to say to Doji....

There are circumstances where a Gap may never fill...  and your post explains that perfectly.

Take Care,
FI4