Market lesson · Market lessons
Reading the gap fill
A gap is a price range no one traded.
When a stock opens above or below the prior close with no trades in between, that empty zone is often revisited. Prices frequently return to fill it, particularly when the gap opened on light or average volume with no strong catalyst.
The gap, and then the fill.
PRIOR CLOSE, then the GAP zone, then price returns and the GAP FILLED label appears. High-volume gaps driven by real news fill less often and less completely.
A stock gaps down 3% on average volume at the open with no specific news. What do gap statistics suggest?
Show the answer
A. The gap has a reasonable chance of filling, partly or fully, during the session. Gaps without strong catalyst news, especially on average volume, fill more often than not within the same or next session.