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Asked a question 11 months ago

What induces gap-ups & gap-downs?

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Gap-ups and Gap-downs result from a news or events that take place normally after the trading hours. This results in an imbalance in supply and demand when the market opens the next day. Hope this answer your query.

Adding to Suruchi's answer, Gaps are pretty common on daily time frame charts because of overnight news and developments pertaining to the security in question or markets in general. They are relatively rare on intraday and weekly time frame charts and are even rarer on monthly and quarterly charts.

In Technical Analysis, there are various types of gaps. To learn about them and understand how to trade them, visit this School of Stocks chapter by clicking here14