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Top Gap Ups and Downs on Tuesday: SAN, BBVA, ING and More

Moomoo News ·  Oct 1 18:00  · Markets

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What are gaps?

Price charts sometimes have blank spaces known as gaps (up gaps and down gaps), where the price of a stock moves sharply up or down, with little or no shares traded in between. This is why the asset's chart shows a gap in the normal price pattern. Normally this occurs between the close of the market on one day and the next day's open.

For an up gap, the low price of the day must be higher than the high price of the previous day. A down gap is just the opposite of an up gap.

Gaps can show signals that something important has happened to the fundamental or the psychology of traders that accompanies this market movement.

For example, if an unexpectedly high earnings report comes out after the market has closed for the day, a lot of buying interest could be generated overnight, leading to an imbalance between supply and demand. When the market opens the next morning, the stock price will likely rise in response to the increased demand from buyers. If the stock price remains above the previous day's high throughout the day, then an up gap is formed.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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