investing guide

Gaps On Stock Charts

When you see gaps on stock charts they are referred to as gaps. Gaps occur mainly when a situation such as a major news story occurs overnight. Depending on the buying or selling pressures related to a story; the stock price can either gap up or down by the time the markets open the next day such as on the chart below. This is because the sellers or the buyers have overwhelmed one or the other causing a gap in the price.

Some professional investors are good at reading gaps when the markets first open. As a beginner though gaps are nothing to be concerned about; unless a major news story occurring overnight is going to significantly impact your portfolio negatively. Which to be honest does not occur that often.

gaps on stock charts

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