Definition
Breakaway gaps occur when price gaps through a significant support or resistance level, often starting a new trend. They typically happen on high volume and are less likely to be filled. They signal a significant change in market sentiment.
Example
A stock trading in a $45-$50 range for months suddenly gaps up to $55 on major news. This breakaway gap signals the end of consolidation and start of a new uptrend.
FAQ
What is Breakaway Gap?
A gap that occurs at the start of a new trend, breaking through support or resistance.
Why is Breakaway Gap important?
Breakaway Gap helps investors evaluate chart patterns and make more informed decisions.