![]() Results: Q: Do gaps always get filled? Statistics says: ~91%Īs you can see from the chart above, the unfilled gap ratios of 30 DJI components have very tight distribution.Īpparently, Visa, Inc (NYSE:V) is an outlier in this data set. ![]() Total, filled, and unfilled gaps are counted for each of 30 ^DJI compoments. Once a gap is logged, I look for how many days it took to "fill" the gap (defined as "low" of day k is lower or equal to "high" of day i), or never got filled (when k reaches the end of time studied). An up gap is logged when "low" of the day is higher than "high" of previous day (day i). ![]() Since Dow stocks are all sound companies and their prices have overall long term uptrend, most "down" gaps should have got filled. With Python+pandas, I fetched historical stock price data of 30 Dow Jones Industry (^DJI) components from Yahoo, dated - (24 years). The conclusion here does NOT apply to down gaps. Many articles and forum discussions cite my research as if the conclusion applied to both up and down gaps. Here, I'd like to share some statistics on how often stock price gaps get filled. Surprisingly, nobody yet gave an empirical answer. However, if you are a curious person (like me), you would wonder: what does "always" means, exactly? 100%? A quick Google search shows many people have wondered the same on forums and blogs. A statement as simple as "gaps always get filled" seems easy to be used as trading strategy. Stock price gap is one of the easiest stock TA patterns by definition (no fancy equations needed). If you know Technical Analysis (TA) of securities, you probably have heard about the statement.
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