Runaway GapsUNR has now experience two consecutive days of “runaway gaps” on its price chart; a rare phenomenon, to be sure. While most ordinary gaps do fill, there is another kind that sometimes does not. These are, of course, the classic “runaway gaps.”
Here is what Stockcharts has to say about that very special kind of price gap:
“Runaway gaps … are best described as gaps that are caused by increased interest in the stock. For runaway gaps to the upside, it usually represents traders who did not get in during the initial move of the up trend and while waiting for a retracement in price, decided it was not going to happen. Increased buying interest happens all of a sudden, and the price gaps above the previous day's close….
“….holding [short] positions waiting for runaway gaps to be filled can be devastating to your portfolio. Likewise, waiting to get on-board a trend by waiting for prices to fill a gap can cause you to miss the big move. Gaps are a significant technical development in price action and chart analysis, and should not be ignored.”
https://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:gaps_and_gap_analysis