Runaway Gap / Measuring Gap / Continuation Gap
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
A gap occurring in the middle of a trend, indicating strong trend momentum. Also called a "measuring gap" because it often occurs near the midpoint of a trend, allowing estimation of the remaining price move. Typically not filled as the trend continues.
Confirm the gap and enter in the trend direction. For existing positions, use it as confirmation of trend continuation for adding or holding.
Project the range from the trend's origin to the runaway gap in the same direction from the gap to determine the target (measuring gap usage). For example: if price rose 100 from the origin before the gap, expect another 100 upside.
Place a stop-loss at the lower edge of the gap (in an uptrend). If the gap is filled, trend deceleration is possible.
Accompanied by moderate volume increase. Not as heavy as a breakaway gap, but typically more than normal volume.