A gap is a break between prices on a chart that occurs when the price of a stock makes a sharp move up or down with no trading occurring in between, or simply stated an area on the chart where there is no trading happening. Gaps can be created by regular buying or selling pressure, earnings announcements, overnight momentum carryover, or any type of news release.
A bullish gap, otherwise known as an upside gap, is where the market's strength makes a gap in an upward position. It can be seen in multiple trading systems, such as a day trading system, stock trading system, options trading system, or futures trading system.
Below is a 2 day chart of AMZN. After hours buying caused a gap (white oval) to the upside in the stock, giving us a perfect visual example.
Related terms: Bearish Gap, Gap Fill, Breakaway Gap, Runaway Gap, Exhaustion Gap
See also: Bull Flag, Cup with Handle, Bear Pennant