How to see the gap of stock k line? What does the gap in the K-line diagram show?
A gap is an area where there is no trading on the K-line. The gap is generally divided into five types: ordinary gap, breakthrough gap, persistent gap, consumption gap and ex right gap. That how to see the stock K-line chart gap? About how to look at the stock K-line chart gap, the following small series on the specific analysis of stock K-line chart gap.
How to see the gap of stock K-line chart?
1. Common notching
The common withdrawal gap often occurs in the case of small stock trading volume, or in the intermediate stage of horizontal consolidation of shares, or in the internal of many static prices. The reason is often the lack of interest of market participants, the market trading is light, relatively small trading volume is enough to cause the price jump short. In general, ordinary gaps are negligible.
2. Breakthrough gap
Breakthrough gap usually occurs in important price range, such as when the stock price needs to break through the support line (or resistance line), or when the stock price needs to break through the neck line after the formation of the top (bottom) of the head and shoulder, or when the stock price crosses or breaks through the moving average of the important trend line, the gap often appears. It reflects the consistent thinking and willingness of market investors, and also indicates that the price fluctuation in the future will be greater and faster.
As the breakthrough gap occurs in the important price respect of the breakthrough, all the selling that is not optimistic about the breakthrough will be eaten, while the people who are optimistic about the breakthrough will be sold at a high price (when the breakthrough rises), so the buyer has to close the transaction at a high price, thus forming a legacy gap (often accompanied by a large trading volume). Once the price breakthrough in this important region is successful, the gap is not easy to be completely closed. If the gap is completely closed immediately and the price returns below the gap, the original price breakthrough is not tenable.
3. Persistent gap
After the breakthrough gap appears, if the upward trend of the market is still obvious, and one party pushes forward the enthusiasm, the price will jump forward again, forming a legacy gap or a series of short jump gaps, which is called persistent gap. Such gaps are often completed with the volume of the trap, which indicates that the trend is developing smoothly. In the upward trend, the emergence of persistent products indicates that the market is strong; in the downward trend, the market is weak. Like the breakthrough gap, the persistent gap will become the supporting area in the market adjustment. If the price returns below the persistent gap, it will be unfavorable to the original trend.
Usually, after a breakthrough gap occurs, the second obvious gap is often a persistent gap rather than a consumption gap. The emergence of persistent gap means that the market will advance by leaps and bounds, and its movement space is at least the distance from the first short jump gap to this gap. If there are several persistent gaps, it will be more difficult to predict the price movement space. At the same time, it means that the consumption gap may come at any time, or the last persistent gap is actually a consumption gap.
4. Consumption gap
The consumption gap often appears at the end of the market trend. After the breakthrough gap and persistent gap have been clearly identified, and the predicted price target has been achieved, many investors begin to predict the arrival of consumption gap. In the final stage of the upward trend, the stock price tends to rise rapidly with the intervention of blind followers, but sober investors begin to close their positions. With the main action of closing positions, there will be a period of price decline after the emergence of the consumption gap, accompanied by huge trading volume. When the follow-up price is lower than the final gap, it means that the consumption fear gap has been formed, and the future market will start to withdraw. However, after the consumption gap appears, the price does not necessarily start to reverse on the same day, and often will continue to increase. After the consumption gap appears, the price does not necessarily start to reverse on the same day, and often will continue to rise, but it indicates that the price will withdraw in the recent period, and the final madness should be over.
However, when there are three or more gaps, it is difficult for investors to determine which gap will be a consumption gap before the price withdrawal occurs and the previous gap is compensated. Only one answer can be obtained from the measurement target, that is, if the price movement space does not reach the distance between the first gap and the gap after the second gap (persistent gap), then the third gap at this stage is likely to be a sustainable gap until the predicted price target is reached.
What does a gap in the K-line show?
When the gap appears, it is often the result of intensified market divergence. The K-line gap of stock is caused by the positive or negative news during the period from the closing of the previous trading day to the opening of the next trading day. The gap of stock K-line is caused by the control of main funds, so the opening price of the current day is much lower than the lowest price of the previous trading day The highest price of trading days is much higher than the situation. The gap of stock K-line causes the K-line to be interrupted.