List of Financial Market Terms

A breakaway gap is a technical analysis term that represents a gap in movement of a stock's price supported by high volume levels.  Breakaway gaps typically take place at the start of a large upside or downside move in the underlying.  If you are able to catch a breakaway gap early, you will likely end up with a successful trade.

Here's an example from our live trade room:

breakaway gap in coinstar stock

The stock in the picture above is CSTR.  The stock had stabilized after some downside pressure, and that strong upside gap (breakaway gap) highlighted with the pink oval was the start of what has turned out to be a huge upside move in the stock. 

An earnings release caused the huge upside gap from 38 to 44, which can be looked at as a possible Runaway Gap.  That said, if this large gap fills soon there will be cause to say it's an Exhaustion Gap.  Time will tell.

Other gaps commonly found in day trading, stock trading, futures trading, and options trading are runaway gaps, exhaustion gaps, bullish gaps, and bearish gaps.

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