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Breakaway gaps

  • By Kenneth Gilliland,
  • Stocks and Commodities Magazine
  • Technical Patterns
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A gap up in a stock’s price is an exciting event. Usually, such moves will be covered by the financial media, creating hysteria and resulting in some people frantically buying the stock “before it’s too late.” Rarely do the pundits provide a reasoned and thorough explanation as to why the large jump in price will lead to any sort of substantial gains over the near future; they just report the awe-inspiring numbers without touching on their technical significance. Read on to learn more...

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Technical analysis focuses on market action – specifically, volume and price. Technical analysis is only one approach to analyzing stocks. When considering what stocks to buy or sell, you should use the approach that you're most comfortable with. As with all your investments, you must make your own determination whether an investment in any particular security or securities is right for you based on your investment objectives, risk tolerance, and financial situation. Past performance is no guarantee of future results.

Article copyright 2012 by Technical Analysis Inc. Reprinted from the June 2011 issue with permission from Stocks & Commodities Magazine.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
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