Four Kinds of Gaps
What a price gap is, why gaps happen, and the four classic types: common, breakaway, runaway and exhaustion gaps.
What a gap is
A gap happens when a stock opens well above or below the previous day’s close, leaving an empty space on the chart where no trading took place. Gaps usually follow news that arrives while the market is closed: earnings reports, guidance changes, analyst actions, economic data, takeover offers or events overseas.
A gap up means the stock opened above the prior day’s high. A gap down means it opened below the prior day’s low. Smaller openings above or below the prior close, without clearing the prior day’s range, are sometimes called partial gaps.
The four classic gap types and where they tend to appear in a trend.
The four classic types
| Type | Where it appears | What it suggests |
|---|---|---|
| Common gap | Inside a trading range, often on light volume | Little meaning; often filled quickly |
| Breakaway gap | Out of a base or range, on heavy volume | The start of a new move |
| Runaway (continuation) gap | In the middle of a strong trend | The trend is accelerating |
| Exhaustion gap | Late in a long, extended move | The final burst before a reversal |
You often only know which kind it was with hindsight, but the context gives strong clues.
How to tell them apart in real time
- Location: out of a sound base (breakaway) or after a long run (possible exhaustion)?
- Volume: heavy volume makes a gap more meaningful; light volume makes it more likely to be a common gap.
- The close: a gap that closes near the high of the day shows buyers kept control; one that fades toward the prior close shows sellers stepped in.
- The news: a genuine change in the business supports a lasting gap more than a vague rumor.
A real breakaway gap
Corning (GLW) closed at $94.95 on January 26, 2026, just under its December high of $96.64. The next morning it opened at $102.07, about 7.5% higher, above that old high, and closed at $109.74 on about 4.2 times its average volume. It came out of a quiet base on heavy volume and closed strong: the classic breakaway profile. As of September 17, 2026, the stock had never traded back down to $94.95.
A real chart: Corning’s breakaway gap on January 27, 2026. Past performance does not predict future results.
Common mistakes
- Treating every gap as a signal; many are just noise.
- Chasing a gap after a long run, when it may be exhaustion.
- Ignoring volume and where the stock closes on the gap day.
- Forgetting that the same news can produce very different gaps in different markets.
Key takeaways
- A gap is an empty space on the chart between one day’s range and the next.
- Gaps usually follow news released while the market is closed.
- The four types: common, breakaway, runaway and exhaustion.
- Location, volume and the close help you tell them apart.
- Corning’s January 27, 2026 gap was a textbook breakaway.