is prr going to close the gap at 12?, page-14

a gap is a price point or range of price points that a share price did not cover within a given period of time. This can be intra-day, daily, or weekly monthly whatever. But generally we focus on daily. Some time back PRR made a high on the daily chart of 12.5c. The next day the lowest price was 15c. Therefore there is a gap on the daily timeframe between 12.5 and 15.

Gaps have a tendency to be filled, with some stocks more than others. Its a psychological self-fulfilling prophecy more than anything, there is scant technical basis for it. It just happens because most bank on it happening.

For the gap in PRR's case to be filled the SP must touch 13c. NOT, I repeat NOT 12.5. Remember the gap is about skipped price points. If the SP goes down to touch even with only 1 trade 13c, then all the previously skipped price points of that gap have been traded and it has been filled.

Gaps act like magnets for the SP depending on the circumstances. A gap created by extremely high volume is less likely ot be filled (breakaway gap). The further back in time a gap exists from current action the less likely it is to be filled. A gap over/under strong resistance or support is more/less likely to be filled depending on the case.

Often gaps will fill precisely to the extent of the nearest price point skipped, other times they overshoot.

Gaps often act as support/resistance especially when they are breakway gaps due to the fact that ALOT of effort was exerted around that point