S&P 500   4,050.83 (+0.57%)
DOW   32,859.03 (+0.43%)
QQQ   315.68 (+0.95%)
AAPL   162.36 (+0.99%)
MSFT   284.05 (+1.26%)
META   207.84 (+1.21%)
GOOGL   100.89 (-0.49%)
AMZN   102.00 (+1.75%)
TSLA   195.28 (+0.72%)
NVDA   273.83 (+1.48%)
NIO   10.46 (+6.41%)
BABA   103.38 (+3.46%)
AMD   97.88 (+1.86%)
T   19.08 (+0.42%)
F   12.29 (+1.99%)
MU   63.09 (-0.71%)
CGC   1.76 (-2.76%)
GE   94.05 (-0.01%)
DIS   98.10 (+1.27%)
AMC   4.97 (-0.60%)
PFE   40.38 (+0.32%)
PYPL   74.39 (+0.28%)
NFLX   338.43 (+1.93%)
S&P 500   4,050.83 (+0.57%)
DOW   32,859.03 (+0.43%)
QQQ   315.68 (+0.95%)
AAPL   162.36 (+0.99%)
MSFT   284.05 (+1.26%)
META   207.84 (+1.21%)
GOOGL   100.89 (-0.49%)
AMZN   102.00 (+1.75%)
TSLA   195.28 (+0.72%)
NVDA   273.83 (+1.48%)
NIO   10.46 (+6.41%)
BABA   103.38 (+3.46%)
AMD   97.88 (+1.86%)
T   19.08 (+0.42%)
F   12.29 (+1.99%)
MU   63.09 (-0.71%)
CGC   1.76 (-2.76%)
GE   94.05 (-0.01%)
DIS   98.10 (+1.27%)
AMC   4.97 (-0.60%)
PFE   40.38 (+0.32%)
PYPL   74.39 (+0.28%)
NFLX   338.43 (+1.93%)
S&P 500   4,050.83 (+0.57%)
DOW   32,859.03 (+0.43%)
QQQ   315.68 (+0.95%)
AAPL   162.36 (+0.99%)
MSFT   284.05 (+1.26%)
META   207.84 (+1.21%)
GOOGL   100.89 (-0.49%)
AMZN   102.00 (+1.75%)
TSLA   195.28 (+0.72%)
NVDA   273.83 (+1.48%)
NIO   10.46 (+6.41%)
BABA   103.38 (+3.46%)
AMD   97.88 (+1.86%)
T   19.08 (+0.42%)
F   12.29 (+1.99%)
MU   63.09 (-0.71%)
CGC   1.76 (-2.76%)
GE   94.05 (-0.01%)
DIS   98.10 (+1.27%)
AMC   4.97 (-0.60%)
PFE   40.38 (+0.32%)
PYPL   74.39 (+0.28%)
NFLX   338.43 (+1.93%)
S&P 500   4,050.83 (+0.57%)
DOW   32,859.03 (+0.43%)
QQQ   315.68 (+0.95%)
AAPL   162.36 (+0.99%)
MSFT   284.05 (+1.26%)
META   207.84 (+1.21%)
GOOGL   100.89 (-0.49%)
AMZN   102.00 (+1.75%)
TSLA   195.28 (+0.72%)
NVDA   273.83 (+1.48%)
NIO   10.46 (+6.41%)
BABA   103.38 (+3.46%)
AMD   97.88 (+1.86%)
T   19.08 (+0.42%)
F   12.29 (+1.99%)
MU   63.09 (-0.71%)
CGC   1.76 (-2.76%)
GE   94.05 (-0.01%)
DIS   98.10 (+1.27%)
AMC   4.97 (-0.60%)
PFE   40.38 (+0.32%)
PYPL   74.39 (+0.28%)
NFLX   338.43 (+1.93%)

Gap Up Stocks

A gap is a break between prices on a chart that occurs when the price of a stock makes a sharp move up or down with no trading occurring in between. Stocks that "gap up" are companies that open at prices that are significantly higher than their previous closing prices, often due to after-hours news items that positively impact investor perceptions of a company's valuation. More about gap up stocks.

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CompanyGap Up %Opening PricePrevious CloseCurrent PricePrice Change Since OpenDaily VolumeIndicator(s)
Maxpro Capital Acquisition Corp. stock logo
JMAC
Maxpro Capital Acquisition
+72.1%$18.60$10.81$29.40+58.1%1.81 millionShort Interest ↓
Gap Up
High Trading Volume
SCYNEXIS, Inc. stock logo
SCYX
SCYNEXIS
+71.9%$2.87$1.67$2.94+2.4%52.04 millionUpcoming Earnings
Analyst Report
News Coverage
Gap Up
Trading Halted
High Trading Volume
VirnetX Holding Corp stock logo
VHC
VirnetX
+32.4%$2.25$1.70$1.41-37.3%48.48 millionUpcoming Earnings
Options Volume
News Coverage
Gap Up
High Trading Volume
Boxed, Inc. stock logo
BOXD
Boxed
+30.7%$0.21$0.16$0.22+6.7%61.47 millionUpcoming Earnings
Gap Up
High Trading Volume
SHF Holdings, Inc. stock logo
SHFS
SHF
+25.0%$0.59$0.47$0.60+1.7%1.69 millionNews Coverage
Positive News
Gap Up
High Trading Volume
Signature Bank stock logo
SBNY
Signature Bank
+24.4%$0.30$0.24$0.19-36.8%51.85 millionShort Interest ↑
Gap Up
High Trading Volume
Safe & Green Holdings Corp. stock logo
SGBX
Safe & Green
+24.2%$1.00$0.80$1.05+5.0%8.68 millionNews Coverage
Gap Up
High Trading Volume
Accelerate Diagnostics, Inc. stock logo
AXDX
Accelerate Diagnostics
+23.6%$0.62$0.50$0.71+14.5%2.44 millionAnalyst Report
Short Interest ↑
News Coverage
Gap Up
High Trading Volume
Sprinklr, Inc. stock logo
CXM
Sprinklr
+18.4%$12.88$10.88$12.79-0.7%5.53 millionEarnings Report
Short Interest ↑
News Coverage
Gap Up
High Trading Volume
Mullen Automotive, Inc. stock logo
MULN
Mullen Automotive
+17.7%$0.12$0.10$0.12-1.6%371.95 millionPositive News
Gap Up
ASP Isotopes Inc. stock logo
ASPI
ASP Isotopes
+16.7%$1.09$0.93$0.89-18.0%23,438Gap Up
Cazoo Group Ltd stock logo
CZOO
Cazoo Group
+16.3%$2.78$2.39$2.29-17.6%1.31 millionShort Interest ↑
News Coverage
Gap Up
High Trading Volume
Rockwell Medical, Inc. stock logo
RMTI
Rockwell Medical
+15.8%$1.83$1.58$1.74-4.9%399,177Short Interest ↑
News Coverage
Gap Up
RenovoRx, Inc. stock logo
RNXT
RenovoRx
+15.1%$4.49$3.90$3.37-24.9%584,828Short Interest ↑
News Coverage
Gap Up
Trading Halted
High Trading Volume
SRAX, Inc. stock logo
SRAX
SRAX
+14.6%$0.55$0.48$0.50-9.1%11,065Gap Up
Healthcare Triangle, Inc. stock logo
HCTI
Healthcare Triangle
+14.2%$0.43$0.38$0.40-6.7%146,732Short Interest ↑
News Coverage
Gap Up
EVgo, Inc. stock logo
EVGO
EVgo
+13.9%$6.55$5.75$7.02+7.2%18.72 millionOptions Volume
News Coverage
Gap Up
High Trading Volume
iSun, Inc. stock logo
ISUN
iSun
+13.2%$1.03$0.91$0.99-3.9%371,591News Coverage
Positive News
Gap Up
High Trading Volume
AWH
Aspira Women's Health
+13.2%$0.41$0.36$0.38-6.3%184,670Analyst Report
News Coverage
Gap Up
Aspira Women's Health Inc. stock logo
AWH
Aspira Women's Health
+13.2%$0.41$0.36$0.38-6.3%184,670Analyst Revision
Gap Up
Altus Power, Inc. stock logo
AMPS
Altus Power
+13.0%$6.08$5.38$5.66-6.9%3.69 millionShort Interest ↑
News Coverage
Gap Up
High Trading Volume
Faraday Future Intelligent Electric Inc. stock logo
FFIE
Faraday Future Intelligent Electric
+12.7%$0.40$0.36$0.35-12.2%182.37 millionShort Interest ↑
News Coverage
Gap Up
High Trading Volume
Decibel Therapeutics, Inc. stock logo
DBTX
Decibel Therapeutics
+12.3%$2.94$2.62$2.77-5.9%17,566News Coverage
Positive News
Gap Up
Digital Media Solutions, Inc. stock logo
DMS
Digital Media Solutions
+12.2%$0.90$0.80$1.07+18.9%729,659Upcoming Earnings
Short Interest ↑
News Coverage
Gap Up
High Trading Volume
Treasure Global Inc. stock logo
TGL
Treasure Global
+11.5%$1.74$1.56$1.60-8.0%24,718Positive News
Gap Up
VistaGen Therapeutics, Inc. stock logo
VTGN
VistaGen Therapeutics
+11.3%$0.15$0.14$0.14-9.1%10.93 millionAnalyst Revision
Gap Up
F45 Training Holdings Inc. stock logo
FXLV
F45 Training
+10.6%$1.36$1.23$1.27-6.6%2.60 millionUpcoming Earnings
News Coverage
Gap Up
High Trading Volume
Fluence Energy, Inc. stock logo
FLNC
Fluence Energy
+10.5%$17.95$16.25$18.64+3.8%3.13 millionAnalyst Upgrade
News Coverage
Positive News
Gap Up
High Trading Volume
National CineMedia, Inc. stock logo
NCMI
National CineMedia
+10.4%$0.13$0.11$0.14+13.8%17.08 millionAnalyst Report
News Coverage
Gap Up
High Trading Volume
Adamas One Corp. stock logo
JEWL
Adamas One
+10.1%$0.87$0.79$0.84-3.4%185,772Positive News
Gap Up
Sunrise New Energy Co., Ltd. stock logo
EPOW
Sunrise New Energy
+10.0%$2.87$2.61$2.76-3.8%45,126News Coverage
Gap Up
Brooge Energy Limited stock logo
BROG
Brooge Energy
+9.7%$5.89$5.37$5.89flat2,486Positive News
Gap Up
Inspirato Incorporated stock logo
ISPO
Inspirato
+9.1%$0.95$0.87$0.93-2.3%119,265Short Interest ↑
Gap Up
Genesis Unicorn Capital Corp. stock logo
GENQ
Genesis Unicorn Capital
+8.9%$11.49$10.55$10.50-8.6%325News Coverage
Positive News
Gap Up
Alpine Acquisition Co. stock logo
REVE
Alpine Acquisition
+8.9%$10.45$9.60$10.49+0.3%228,576News Coverage
Gap Up
High Trading Volume
MarketWise, Inc. stock logo
MKTW
MarketWise
+8.8%$1.86$1.71$1.85-0.5%125,706News Coverage
Gap Up
Shapeways Holdings, Inc. stock logo
SHPW
Shapeways
+8.7%$0.45$0.41$0.41-7.9%127,400News Coverage
Gap Up
Greenbrook TMS Inc. stock logo
GBNH
Greenbrook TMS
+8.5%$1.27$1.17$1.25-1.6%1.01 millionShort Interest ↑
Gap Up
High Trading Volume
Lizhi Inc. stock logo
LIZI
Lizhi
+8.5%$0.83$0.77$0.79-5.4%306,802Short Interest ↑
News Coverage
Gap Up
Aziyo Biologics, Inc. stock logo
AZYO
Aziyo Biologics
+8.2%$1.72$1.59$1.63-5.2%83,330Insider Buying
Short Interest ↑
Analyst Revision
News Coverage
Gap Up
ZVSA
ZyVersa Therapeutics
+8.1%$2.14$1.98$2.00-6.5%32,290Positive News
Gap Up
Diebold Nixdorf, Incorporated stock logo
DBD
Diebold Nixdorf
+8.0%$1.21$1.12$1.08-10.7%7.15 millionPositive News
Gap Up
High Trading Volume
Pyxis Oncology, Inc. stock logo
PYXS
Pyxis Oncology
+7.9%$4.90$4.54$6.00+22.4%50.02 millionShort Interest ↓
Analyst Revision
News Coverage
Gap Up
Trading Halted
High Trading Volume
Kohl's Co. stock logo
KSS
Kohl's
+7.9%$23.79$22.05$22.88-3.8%8.15 millionAnalyst Report
Insider Buying
Short Interest ↑
Gap Up
HPLT
Home Plate Acquisition
+7.9%$11.26$10.44$10.20-9.4%31,602Positive News
Gap Up
Brera Holdings PLC stock logo
BREA
Brera
+7.7%$3.94$3.66$3.61-8.4%6,800News Coverage
Gap Up
Brera Holdings PLC stock logo
BREA
Brera
+7.7%$3.94$3.66$3.61-8.4%2,355News Coverage
Gap Up
Xeris Biopharma Holdings, Inc. stock logo
XERS
Xeris Biopharma
+7.6%$1.42$1.32$1.46+2.8%2.59 millionShort Interest ↑
News Coverage
Positive News
Gap Up
High Trading Volume
Emerson Radio Corp. stock logo
MSN
Emerson Radio
+7.5%$0.56$0.52$0.55-2.7%851Analyst Report
Gap Up
Theratechnologies Inc. stock logo
THTX
Theratechnologies
+7.5%$0.83$0.77$0.81-2.4%192,237Short Interest ↓
News Coverage
Gap Up
High Trading Volume
OEG
Orbital Energy Group
+7.5%$0.13$0.12$0.13+3.7%1.25 millionGap Up
Orbital Infrastructure Group, Inc. stock logo
OIG
Orbital Infrastructure Group
+7.5%$0.13$0.12$0.13+3.7%1.25 millionGap Up
OKYO Pharma Limited stock logo
OKYO
OKYO Pharma
+7.4%$1.46$1.36$1.50+2.7%56,903News Coverage
Positive News
Gap Up
Tonix Pharmaceuticals Holding Corp. stock logo
TNXP
Tonix Pharmaceuticals
+7.3%$0.63$0.59$0.62-2.4%1.07 millionGap Up
Sangoma Technologies Co. stock logo
SANG
Sangoma Technologies
+7.2%$3.56$3.32$3.65+2.5%12,536Short Interest ↑
News Coverage
Gap Up
Novan, Inc. stock logo
NOVN
Novan
+7.2%$1.19$1.11$1.20+0.8%174,396Short Interest ↑
News Coverage
Gap Up
Beasley Broadcast Group, Inc. stock logo
BBGI
Beasley Broadcast Group
+7.1%$0.89$0.83$0.84-5.6%9,112Analyst Report
Short Interest ↓
News Coverage
Gap Up
Youdao, Inc. stock logo
DAO
Youdao
+7.1%$8.48$7.92$8.30-2.1%815,340Options Volume
News Coverage
Gap Up
High Trading Volume
Creative Realities, Inc. stock logo
CREX
Creative Realities
+7.0%$2.29$2.14$2.27-1.0%35,212Stock Split
Short Interest ↓
News Coverage
Gap Up
Airspan Networks Holdings Inc. stock logo
MIMO
Airspan Networks
+7.0%$0.75$0.70$0.73-2.7%20,476Gap Up
Cenntro Electric Group Limited stock logo
CENN
Cenntro Electric Group
+7.0%$0.45$0.42$0.46+3.3%4.75 millionShort Interest ↑
News Coverage
Gap Up
Gol Linhas Aéreas Inteligentes S.A. stock logo
GOL
Gol Linhas Aéreas Inteligentes
+6.9%$2.63$2.46$2.63flat1.48 millionShort Interest ↓
Analyst Revision
Gap Up
HCW Biologics Inc. stock logo
HCWB
HCW Biologics
+6.8%$1.56$1.46$1.33-14.7%7,460Short Interest ↓
News Coverage
Gap Up
Bionomics Limited stock logo
BNOX
Bionomics
+6.8%$2.20$2.06$1.80-18.2%47,315Short Interest ↑
Gap Up
Vapotherm, Inc. stock logo
VAPO
Vapotherm
+6.8%$0.63$0.59$0.59-6.1%154,071Gap Up
Erasca, Inc. stock logo
ERAS
Erasca
+6.8%$3.16$2.96$2.90-8.2%1.53 millionAnalyst Report
Insider Buying
News Coverage
Gap Up
IDEX Biometrics ASA stock logo
IDBA
IDEX Biometrics ASA
+6.7%$7.46$6.99$6.99-6.3%121Positive News
Gap Up
Paratek Pharmaceuticals, Inc. stock logo
PRTK
Paratek Pharmaceuticals
+6.7%$2.08$1.95$2.12+1.9%613,213Insider Buying
News Coverage
Gap Up
Azul S.A. stock logo
AZUL
Azul
+6.6%$7.26$6.81$7.10-2.2%1.69 millionShort Interest ↓
Gap Up
Inter & Co, Inc. stock logo
INTR
Inter & Co, Inc.
+6.5%$1.79$1.68$1.80+0.6%301,740Analyst Report
Short Interest ↑
Gap Up
Centessa Pharmaceuticals plc stock logo
CNTA
Centessa Pharmaceuticals
+6.4%$4.15$3.90$3.90-6.0%334,006Positive News
Gap Up
High Trading Volume
Holley Inc. stock logo
HLLY
Holley
+6.4%$2.50$2.35$2.64+5.6%578,041Analyst Report
Short Interest ↑
Gap Up
Inozyme Pharma, Inc. stock logo
INZY
Inozyme Pharma
+6.4%$5.00$4.70$4.69-6.2%1.45 millionInsider Buying
Analyst Revision
Gap Up
Generation Income Properties, Inc. stock logo
GIPR
Generation Income Properties
+6.3%$4.86$4.57$4.56-6.3%10,549Analyst Report
Short Interest ↓
News Coverage
Gap Up
Latham Group, Inc. stock logo
SWIM
Latham Group
+6.3%$3.03$2.85$2.78-8.3%363,918Gap Up
AngloGold Ashanti Limited stock logo
AU
AngloGold Ashanti
+6.3%$24.19$22.76$24.15-0.2%4.67 millionAnalyst Upgrade
Short Interest ↑
Gap Up
Stran & Company, Inc. stock logo
SWAG
Stran & Company, Inc.
+6.2%$1.70$1.60$1.71+0.6%29,935News Coverage
Positive News
Gap Up
Axcella Health Inc. stock logo
AXLA
Axcella Health
+6.2%$0.46$0.43$0.50+8.7%166,127Short Interest ↓
News Coverage
Positive News
Gap Up
STRATA Skin Sciences, Inc. stock logo
SSKN
STRATA Skin Sciences
+6.2%$1.14$1.07$1.14-0.1%11,468Upcoming Earnings
Gap Up
Alaunos Therapeutics, Inc. stock logo
TCRT
Alaunos Therapeutics
+6.2%$0.68$0.64$0.66-3.0%629,567Analyst Report
News Coverage
Gap Up
Semantix, Inc. stock logo
STIX
Semantix
+6.2%$4.45$4.19$4.40-1.1%76,457Analyst Report
Analyst Revision
News Coverage
Gap Up
Huize Holding Limited stock logo
HUIZ
Huize
+6.2%$1.37$1.29$1.33-2.9%74,326Short Interest ↓
Gap Up
ESS Tech, Inc. stock logo
GWH
ESS Tech
+6.2%$1.20$1.13$1.16-3.3%2.29 millionGap Up
Polestar Automotive Holding UK PLC stock logo
PSNY
Polestar Automotive Holding UK
+6.1%$3.81$3.59$3.72-2.4%4.65 millionUpcoming Earnings
News Coverage
Gap Up
Xos, Inc. stock logo
XOS
XOS
+6.0%$0.54$0.51$0.51-6.5%430,158Analyst Report
News Coverage
Gap Up
JD.com, Inc. stock logo
JD
JD.com
+6.0%$43.64$41.18$44.40+1.7%31.25 millionOptions Volume
News Coverage
Gap Up
High Trading Volume
Cosan S.A. stock logo
CSAN
Cosan
+6.0%$12.45$11.75$12.17-2.2%602,462Upcoming Earnings
Short Interest ↓
Positive News
Gap Up
Alset Inc. stock logo
AEI
Alset
+5.9%$1.62$1.53$1.52-6.2%12,842Upcoming Earnings
Short Interest ↑
News Coverage
Gap Up
Koninklijke Philips stock logo
PHG
Koninklijke Philips
+5.9%$17.88$16.89$17.91+0.2%1.96 millionPositive News
Gap Up
High Tide Inc. stock logo
HITI
High Tide
+5.8%$1.27$1.20$1.27flat273,526News Coverage
Positive News
Gap Up
Predictive Oncology Inc. stock logo
POAI
Predictive Oncology
+5.8%$0.30$0.28$0.28-7.6%221,106Short Interest ↓
News Coverage
Positive News
Gap Up
Sunlight Financial Holdings Inc. stock logo
SUNL
Sunlight Financial
+5.8%$0.31$0.29$0.30-2.4%207,176Upcoming Earnings
Gap Up
TScan Therapeutics, Inc. stock logo
TCRX
TScan Therapeutics
+5.7%$2.74$2.59$2.57-6.2%13,327Positive News
Gap Up
NextPlat Corp stock logo
NXPL
NextPlat
+5.6%$1.69$1.60$1.55-8.3%3,469Positive News
Gap Up
Avalo Therapeutics, Inc. stock logo
AVTX
Avalo Therapeutics
+5.6%$1.70$1.61$1.75+2.9%5,545Short Interest ↓
News Coverage
Gap Up
Applied Molecular Transport Inc. stock logo
AMTI
Applied Molecular Transport
+5.6%$0.38$0.36$0.34-11.8%124,778Analyst Downgrade
Short Interest ↑
Gap Up
Taoping Inc. stock logo
TAOP
Taoping
+5.4%$0.65$0.62$0.65flat9,396Short Interest ↑
News Coverage
Gap Up
Bolt Biotherapeutics, Inc. stock logo
BOLT
Bolt Biotherapeutics
+5.4%$1.36$1.29$1.34-1.5%1.54 millionNews Coverage
Positive News
Gap Up
High Trading Volume
Altisource Portfolio Solutions S.A. stock logo
ASPS
Altisource Portfolio Solutions
+5.4%$4.87$4.62$4.66-4.3%121,206Analyst Report
Short Interest ↑
News Coverage
Gap Up
1-800-FLOWERS.COM, Inc. stock logo
FLWS
1-800-FLOWERS.COM
+5.4%$11.50$10.91$11.45-0.4%847,162Analyst Upgrade
Gap Up
How Investors Can Identify and Successfully Trade Gap-Up Stocks

Trading gap-up stocks can be a profitable strategy for active, risk-tolerant investors

A gap-up stock is one that opens trading at a higher level than the previous day’s closing price. This is often signified by a sharp move with no other trading occurring before or after the gap. Investors can identify gap-up stocks during after-hours and pre-market trading. Reasons why a sock may gap up include the release of news about the stock, such as a favorable earnings report or some sort of geo-political event that may incite speculators to bid up the price of the stock.

A gap-up stock represents a significant stock trading opportunity. However, it requires the discipline to follow the trend and setting trailing stops that allow investors to exit the trade when the direction of the stock no longer supports that trend.

In this article we’ll break down gap-up stocks by defining what they are and how you can identify them. We’ll also provide an overview of gaps so that you can understand how to interpret a stock chart. We’ll also go over the most common gap trading strategies.

A stock that is gapping up indicates a large volume of buyers. However, what’s harder to tell is whether the gapping action is short lived or whether it will continue to become a trend. Investors who want to trade gap-up stocks can easily find them by using a stock screener. Once you identify a potential gap-up stock to trade, you should carefully study the longer term charts of the stock to see if there are clearly defined areas of support and resistance.

If you’re new to gap trading, it is important to look at stocks that are trading with a high volume (a good average volume is above 500,000 shares a day). A gap up stock is clearly represented in a candlestick pattern. A candlestick is a technical indicator that shows the opening and closing price of a stock for a specific period. The color and composition of the candlestick provide information about a stock’s direction and momentum.

The gap in a gap-up stock is either a “full gap” or “partial gap”.

  • A full gap occurs when a stock opens at a higher level than the previous session’s high.
  • A partial gap occurs when a stock opens above the previous day’s closing price.

Here’s an example that illustrates the difference between a full gap and a partial gap. During the trading day, the stock of Company ABC closes at $39. However, during the day the stock was trading as high as $41. At the opening bell the next day, the stock opens at $42.50. That stock would be opening higher than both its previous close ($39) and its previous daily high ($41). This would indicate a full gap. However, if the same stock opens at $40, it will only show a partial gap. While closing above its previous closing price of $39, it did not “gap up” above the previous session’s high price of $41.

 The importance of understanding the difference between a full gap and a partial gap is about supply and demand which highlights the difference in risk and potential gain. In general, full gap stocks provide a better opportunity for profit over several days.

For example, a full gap means there is usually sufficient desire to buy or sell the stock. This increased demand will be a signal to market makers that there has to be a significant price change to accommodate any orders that have to be filled. With a partial gap, demand might be such that only a small price increase above the closing price will allow buy or sell orders to be filled.

Beyond the terms full gap and partial gap, gaps generally fall into one of four categories:

  • Breakaway Gaps – These are gaps that take place at the end of a pricing pattern and signal the start of a new trend. Breakaway gaps will coincide with high volume.
  • Exhaustion Gaps – These are gaps that take place towards the end of a pricing pattern and represent a final attempt to set a new high or low. Exhaustion gaps will coincide with low volume.
  • Common Gaps – These are gaps that cannot be placed in a price pattern. These simply represent an area where the price has gapped.
  • Continuation Gaps – These gaps occur in the middle of a price pattern and signal a rush of buyers or sellers who share a common belief in the underlying stock’s future direction.

It is common for gaps to get filled in naturally. This means the stock price will move back to its original level. Because of the volatility around earnings season, this is typically a time when stocks will make large price movements.

In some cases, investors (usually individual investors) may be overly enthusiastic about a stock. In almost every case, this will result in a correction. Another reason may be due to a lack of support and resistance. Support and resistance lines are technical indicators that traders can use to set price targets. When a stock gaps up, it usually doesn’t leave behind a support or resistance line to anchor that price level. Finally, the type of price pattern can indicate whether a gap will be filled. For example, exhaustion gaps come at the end of a price pattern, making them more likely to be filled. Breakaway and continuation gaps, which are confirming the direction of a trend, are less likely to be filled.

When gaps get filled within the same trading day as they occur, the gap is said to have undergone fading. This is common during times such as earnings season.

As an investment strategy, trading gaps involve stocks that have above-average volatility. This also means it entails above average risk. However, investors can trade gaps successfully (and profitably). Here are some guidelines that can help you stay away from poor gap-up stock trades.

  • If the gap of a stock has started to fill, it will almost always continue in that direction. This is because the stock has no immediate support and resistance.
  • Be sure you understand the type of gap you are trading. An exhaustion gap and continuation gap move in opposite directions.
  • Before you take a position, be sure that the stock price has started to break in the direction you foresee. Individual investors are the ones who tend to get overly enthusiastic about a stock. This plays into the hand of institutional investors who may support the trend in order to boost their portfolios.
  • The volume should be consistent with the kind of gap you are trading.

Once you are familiar with the mechanics of gaps and understanding how to look for potential gap trading opportunities, it’s time to look at some common gap trading strategies. These involve having clear rules for entering and exiting a trade. Gap trading can be risky and having the discipline to follow entry and exit points is one way for you to help minimize that risk.

For each gap up strategy, there is a short and a long trading signal. Most gap trading occurs one hour after the market opens to allow time for the stock price to settle into a range. No matter what strategy is being used, it is important to set trailing stops that provide a point where you exit the trade in case the trade starts moving in the opposite direction. For example, if you buy a stock at $50, you could set a trailing stop of 5 percent, in this case $47.50. If the stock rises to $60, you raise the stop to $55.50 (5% of $60) and keep on raising it while the price rises. The opposite would occur if you’re trying to short the same stock at $50. In this case, you would set a trailing stop at $53.50. If the price drops to $40, you would reset the stop at $42. Trailing stops will usually be tighter (smaller) for partial gap stocks as opposed to full gap stocks.

Here are the most common trading strategies for gap-up stocks. These will occur one hour after the market open (typically 10:30 A.M. EST). The same strategy is applied to either full gap or partial gap positions. These strategies also work for after-hours or pre-market trading.

  • Long Position (Buy): Set a long trailing stop at two ticks (defined by the bid/ask spread) above whatever the high stock price was in the first hour of trading after the market open. The bid/ask spread is usually either one-eight or one-quarter point.
  • Short Position (Sell): Set a long trailing stop at two ticks below the lowest stock price reached in the first hour of trading.

The Modified Trading Method is an advanced version of the two strategies shown above. This method can apply to either the long or short position. The difference in this method is that instead of requiring a trader to wait until the price breaks above the high (long) or below the low (short), they trade in the middle of a price rebound. This strategy is only used on a stock that has been trading on at least 2X its average volume over the previous five days.

  • Modified Trading Method Long Position (Buy): Set a long stop that is equal to the average of the open price and the high price that was set in the first hour of trading.
  • Modified Trading Method Short Position (Sell): Set a long stop that is equal to the average of the open price and the low price that was set in the first hour of trading.

Many investors engage in momentum trading. To these investors “trading the gap” (also called “gapping”) is not logical. After all, what goes up must come down – and usually hard. So if a stock gaps up, it’s due for a correction?

This thinking can be true for stocks that show weak fundamentals, or when the market is trending down. In those cases, gap-up stocks – no matter how strong the lift – rarely stay at those levels. However, that thinking can work against investors when the right conditions are met.

For example, in a bullish market, a stock that is showing strong fundamentals may gap up after a strong earnings report. When institutional investors learn about the bullish report, they may drive the price even higher. If traders stay away from the stock believing that momentum is working against them, they may miss out on significant gains.

One of the easiest ways to trade stocks, especially if you are looking to become a day trader is to look for gap-up stocks. Gap-up stocks are stocks that show significant price movement after the stock market closes for the day.

Investors can find gap-up stocks at any time. However, they are particularly common during earnings season when top line and/or EPS numbers that beat analysts’ expectations can cause a stock to surge. Today’s online stock screeners give investors an easy way for traders to identify and track gap-up stocks.

Trading gap-up stocks requires a disciplined system that requires traders to use trailing stops at well-defined entry and exit points to limit loss and protect profits. Not every gap stop is ideal for trading. Investors need to pay attention to other technical indicators such as trading volume to decide whether or not a stock may produce a profitable trade.


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