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Gaps - Gaps are areas on a price chart where no trading occurs. The last bar's low is higher than the previous bar's high for a gap-higher move. The last bar's high is lower than the previous bar's low to form a gap-lower move. For example, if a market closes at 100 in one session and then opens at 105 in the next section, a 5-point gap would be evident on a chart.

With electronic trading 24 hours a day, gaps are less likely to appear as the market moves fluidly from one price to the next. However, for those markets that have only day sessions, which includes most physical commodities as well as stocks, gaps may show up because of some overnight news or development that causes a sudden shift in prices. Price gaps typicallly indicate a strong market move, and many times the gaps will then serve as important support or resistance levels on the chart.