Breakaway Gap in Stocks

Breakaway Gap Definition

A breakaway gap is a gap that has a strong gap with a surge in volume. While the volume on a breakaway gap is high, it is not so high that it produces a climactic top or bottom. The momentum in a breakaway gap is so strong that the stock will move well in the direction of the primary trend, before any counter move can materialize. You always want to trade in the direction of a breakaway gap.

Example of a Breakaway Gap

Breakaway gaps can occur on any time frame. Below is an example of a breakaway gap play.

Breakaway GapBreakaway Gap

 

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