RE: Newbie Question/ patience please18 Nov 2020 18:49
Where the price suddenly jumps from say 80p to 90p without passing the points in between this can create a 'gap' from a technical charting standpoint it looks like a gap. It is thought, and generally seen, that at some point the share must trade in that gap (without news to fundamentally shift the trading range), before it will move further up.
As to why, i've a few thoughts, technical charting (in my opinion) infers the behaviours of all investors by their actions no the share price. Think about 'testing a level' it'll often take several attempts to break through a limit, the first time it's hit some will sell, the price will drop, the second time it's hit some more will sell, the price drops, this repeats until there are no more people willing to sell at that price. Then the price of the share can pass through that level.
Quite how this works with gaps I'm not sure, perhaps there are stop losses/gains sat there waiting to be triggered and the market makers trigger them, once they are gone they've got some cheap shares and they can let it rise again, with no gap there are no stop losses/gains to trigger, so there is no ability to encourage the price that far.
I may not be right, but it helps me think about why chartists draw the patterns that they draw.