Gap Up
A gap up occurs when a stock opens above the prior session's high, leaving a price range where no trading occurred. Gaps typically follow news, earnings or upgrades, and represent a repricing that happened outside market hours.
- Bias
- Bullish
- Category
- Gaps & Islands
- Scan cadence
- Every close
What has to be true for a Gap Up to trigger
- The open above the previous session's high
- The gap of meaningful size relative to the stock's normal range
- The gap holding rather than filling immediately
How PatternGrade grades it
A larger gap relative to the stock's typical range, on heavier volume, and holding its gains through the session, grades higher.
Every scanner grades its hits A+, A or B from the pattern's own measurable structure. The grading is deterministic — the same chart always produces the same grade. It describes how closely the chart matches the pattern, not how likely anything is to happen; no hit rate or probability is attached to a grade. The reasoning is set out in the methodology.
What a Gap Up looks like in practice
A stock closes at $52.40 and opens the next morning at $58.90 following an earnings release, above the prior session's high of $53.10, so the entire $53.10-$58.90 zone has no trading in it. Volume runs six times average, the stock holds the opening range all day, and closes at $59.60 near its high rather than fading back toward the gap.
How a Gap Up fails
The gap fills. Price drifts back down through the vacuum and closes it, which happens often enough that gap-fade is a strategy in its own right. The specific warning sign is a stock that opens well up and then spends the session grinding lower. An unfilled gap that holds its opening range is a very different thing from one that is sold all day. Gaps into resistance or after an already extended run fill most readily.
What this pattern is telling you
Gaps are the most news-driven signal in the library. By the time one appears, the information that caused it is public and the easy part of the move is done.
PatternGrade is not a financial advisor and does not give buy or sell recommendations. Targets and stops shown on a pattern are reference levels derived from its geometry, not advice.
How to scan for Gap Up setups
PatternGrade rescans every liquid US stock (~4,500 names) for this pattern after every close and returns the hits as a graded list, with the pattern drawn on each chart, so you review setups rather than hunt for them.
Join the waitlist to be invited when sign-ups reopen and see the current Gap Up list, or browse all 75 patterns.
Gap Up FAQ
What causes a stock to gap up?
Almost always news released outside market hours, such as earnings, guidance, upgrades or corporate actions, repricing the stock before the session opens.
Do gaps always fill?
No. The saying that all gaps fill is folklore. Many do, some never do, and breakaway gaps that begin a new trend are specifically the ones that tend not to.
Do all gaps get filled?
No. That piece of folklore is stated far more confidently than the evidence supports. Many gaps fill, particularly small ones and those without fundamental news behind them, but breakaway gaps on genuine developments can go unfilled for years. Treating 'gaps always fill' as a rule is a reliable way to fight a trend.
What makes a gap up significant?
Volume, the reason behind it, and where it occurs. A gap out of a long consolidation on heavy volume after real news is a very different event from a gap in an already extended stock on ordinary volume. PatternGrade grades on size relative to the stock's own range, volume, and structural position.
Should the stock hold its opening range?
It is one of the more useful same-day tells. A stock that gaps up and spends the session above its opening range is being accumulated; one that gaps up and fades all day is being sold into. PatternGrade is end-of-day, so it sees where the session closed relative to the gap.
How large does a gap need to be?
Large relative to the stock's own typical range rather than any fixed percentage. A 2% gap on a stock that normally moves 1% a day is significant; the same gap on a stock that routinely swings 8% is noise.
Patterns a Gap Up is mistaken for
- Breakaway Gap
- A breakaway gap specifically leaves a consolidation, carrying price out of a defined range. A gap up can occur anywhere, including in the middle of an existing trend.
- Gap Fill Reversal
- That pattern fires when price returns to an earlier gap. This one fires when the gap is created.
- Island Reversal
- An island requires a gap in one direction followed later by a gap the other way, stranding bars between them. A gap up is a single event.
- Relative Volume
- Gaps almost always coincide with high relative volume, but RVOL has no price-structure requirement.
Last reviewed . Structure and grading for the Gap Up are reviewed against the scanner's own rules.