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Finance: What is Breakaway Gap? 7 Views


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Description:

What is a Breakaway Gap? A breakaway gap is the point in time when a stock price changes direction (it goes from increasing to decreasing or vice versa). After this happens, lots of trading occurs depending upon the direction of the price.

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Transcript

00:00

Finance a la shmoop.. what is breakaway gap? well Letterman has one yeah that but [David Letterman's front teeth appear]

00:09

here we're talking about a trading pattern like on a stock chart like this

00:13

thing where the breakaway gap is a sudden change in trading pattern like

00:18

you're walking along just fine and easily recognized in comfy double bottom

00:22

pattern like this but then blam the company reports an awesome quarter in [Stock chart dramatically rises]

00:27

the stock zooms upward outside of the pattern it goes from here to here and

00:32

well now what like there's no pattern yet so what do we do well depending on

00:36

your lean prayer might help is the stock heading down now to normalize or up more

00:42

because now everyone thinks it's the next Google and wants to own it for the

00:46

long run so breakaways go up like this and

00:49

sometimes they go down like this but either way they break away from a [Arrow points to stock charts breakaway gap]

00:54

pattern and yeah, clearly this was not the next Google! oh well

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