---
title: Reading Price Gaps and Identifying Entry Points
description: Identify four types of price gaps, evaluate trading volume dynamics to avoid gap fill traps, and identify technical entry points during VN-Index market swings.
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# Reading Price Gaps and Identifying Entry Points

> Identify four types of price gaps, evaluate trading volume dynamics to avoid gap fill traps, and identify technical entry points during VN-Index market swings.

Gini · Quant & data · 2026-11-01 · https://ginity.vn/en/blog/reading-price-gaps-and-entry-points-in-technical-analysis

_Lead analyst: Đào Ngọc Bảo Linh · Finance and securities specialist · Ho Chi Minh City · 0932 439 639_

## Key takeaways

- Price gaps occur during supply-demand imbalances at the open, categorized into 4 primary types: common gaps, breakout gaps, runaway gaps, and exhaustion gaps.
- During the trading session on October 30, 2026, the VN-Index dropped 32.53 points to 1,741.62 points, nearing the upward gap range of 1,738–1,740 points formed earlier.
- Average trading volume on the HoSE in the final week of October 2026 according to CafeF records reached over 645 million shares per session, down 9.38% from the week of October 19 to October 23, 2026.
- Securities firms identified technical short-term resistance for the VN-Index at 1,755–1,775 points and psychological resistance at 1,780–1,800 points in October 2026.

A price gap formed on a technical chart is a phenomenon that reflects a sharp imbalance between market supply and demand forces. When buy or sell orders accumulate with overwhelming volume outside regular trading hours, the opening call auction clears trades at an abrupt price jump, leaving an empty price interval between consecutive sessions. Understanding how price gaps behave helps investors separate standard market fluctuations from the onset of powerful directional trends.

## Mechanics of Price Gap Formation

A price gap occurs when no matching transactions take place within a specific price band between two consecutive trading sessions. On a Japanese candlestick chart, this structural event creates a visible blank interval that contains neither candle bodies nor shadows.

The emergence of a price gap typically stems from material news that arrives outside official trading hours. Corporate financial statements for the third quarter of 2026, central bank monetary policy decisions, or broad swings across international financial markets can alter market expectations overnight. When trading resumes in the periodic call auction to determine the opening price, large buy or sell orders enter the electronic order book at limit ceiling or floor prices, triggering an immediate price jump at the opening bell.

Securities trading in Vietnam operates under the framework of the [Law on Securities No. 54/2019/QH14](https://vanban.chinhphu.vn/?docid=198541&pageid=27160) passed by the National Assembly on November 26, 2019. This legislation establishes clear legal standards for fair and transparent transactions to protect investor rights on organized trading floors. Centralized order matching on the exchange ensures that opening prices reflect genuine market supply and demand.

When buying demand substantially outpaces available selling supply, the opening price of the subsequent session clears higher than the preceding session's highest traded price, producing an upward gap. Conversely, when intense selling pressure dominates the order queue, the opening price drops lower than the preceding session's lowest traded price, establishing a downward gap.

## Four Types of Price Gaps by Volume

According to technical analysis documentation from [StockCharts](https://chartschool.stockcharts.com/table-of-contents/chart-analysis/gaps-and-gap-analysis), price gaps are categorized into four basic structures comprising common gaps, breakout gaps, runaway gaps, and exhaustion gaps. The distinction between these patterns lies in their structural location within a broader trend and the corresponding confirmation from trading volume.

The first group consists of common gaps, which develop within narrow sideways trading ranges. Trading volume during the session creating a common gap remains modest or near average levels. Because these gaps lack backing from institutional capital flows, common gaps tend to fill rapidly within a few subsequent trading sessions.

The second group comprises breakout gaps, which occur when price action clears a long consolidation base or decisively breaks through an established support level. Trading volume in this session according to technical documentation from StockCharts often surges 1.5 to 2 times above the 20-session average. A breakout gap confirms substantial institutional participation, establishing a resilient defensive buffer that rarely fills in the near term.

The third group represents runaway gaps, which appear near the midpoint of an active and strong trend. Trading volume remains elevated and steady, reflecting sustained conviction among market participants driving the directional move. This type of gap provides a technical measuring tool to gauge the potential length of the ongoing advance or decline.

The fourth group consists of exhaustion gaps, which emerge during the final stages of an extended rally or steep sell-off. Trading volume surges to an extreme spike, but price spread in subsequent candles narrows noticeably. This dynamic indicates that final buying interest has been absorbed, warning that trend momentum is diminishing and increasing the risk of a short-term trend reversal.

| Gap Type | Chart Location | Volume Characteristic | Fill Probability | Technical Role |
| :--- | :--- | :--- | :--- | :--- |
| Common Gap | Sideways trading range | Low or average | Usually fills within a few sessions | Short-term noise, minimal directional value |
| Breakout Gap | Clears base or resistance | Surges well above average | Rarely fills immediately | Confirms new trend, establishes support buffer |
| Runaway Gap | Midst of active trend | High and steady | Rarely fills during active trend | Measures trend momentum, reinforces direction |
| Exhaustion Gap | Climax of steep advance or decline | Extreme spike then stalls | Fills quickly upon reversal | Signals trend exhaustion, warns of reversal |

*Source: Summary of four price gap types based on technical analysis documentation from StockCharts (accessed October 2026).*

> Chart: Estimated technical gap fill frequency by gap type. % fill rate. Common Gap: 88.5; Breakout Gap: 24.0; Runaway Gap: 15.5; Exhaustion Gap: 92.0.

Data from the chart above illustrates a clear divergence in fill probabilities across gap classifications: while exhaustion gaps and common gaps show fill rates exceeding 88%, breakout gaps recorded an estimated fill probability of approximately 24.0% during the 2026 advance cycle, according to Ginity synthetic technical statistics.

## Calculating Gap Width and Fill Ratios

The width of a price gap is determined by calculating the absolute difference between the price boundaries of two consecutive trading sessions.

For an upward gap, the gap width is calculated using the following mathematical formula:

$$\text{Upward Gap Width} = \text{Current Open Price} - \text{Previous High Price}$$

For a downward gap, the mathematical formula is defined as:

$$\text{Downward Gap Width} = \text{Previous Low Price} - \text{Current Open Price}$$

When prices retrace to test the gap zone, the gap fill ratio measures the extent of price retracement relative to the initial gap size:

$$\text{Gap Fill Ratio} = \frac{\text{Lowest Retracement Price} - \text{Previous Close Price}}{\text{Current Open Price} - \text{Previous Close Price}} \times 100\%$$

In an illustrative 2026 hypothetical example based on Ginity calculation to demonstrate the mathematical formula, a sample stock on October 15, 2026 recorded a closing price of 50,000 VND and an intraday high of 50,500 VND. On October 16, 2026, the opening price surged to 52,000 VND, creating an upward gap of 1,500 VND. In the trading session on October 17, 2026, the price retreated to an intraday low of 51,000 VND before rebounding, corresponding to a gap fill ratio of 50.0%.

## Gap Fill Traps and Buffer Entry Points

A frequent error among market participants is assuming that all price gaps must inevitably close in the near future. This belief often leads traders to liquidate holdings prematurely upon the appearance of a breakout gap in hopes of buying back at lower prices, or buying into a downward gap too early while a severe downtrend remains intact.

Market observations indicate that breakout gaps reflect meaningful revaluations of corporate fundamentals and structural shifts in supply and demand. When institutional capital actively accumulates shares, the resulting gap acts as an enduring support buffer. Rather than filling completely, market prices frequently retest only the upper boundary of the gap before resuming their upward trajectory.

To identify entry points with greater clarity, investors often monitor price pullbacks that retest the gap buffer zone in conjunction with complementary technical indicators. When price retraces toward the upper boundary of a gap and trading volume contracts significantly, it demonstrates that selling pressure is dissipating.

Combining price gaps with [Bollinger Bands volatility bands](/en/blog/bollinger-bands-reading-price-volatility) helps identify volatility contraction zones before an explosive expansion. When a breakout gap breaches the upper band on surging volume, the upward move gains technical confirmation.

Simultaneously, evaluating momentum with the [RSI indicator](/en/blog/rsi-indicator-divergence-and-momentum-zones) provides insight into prevailing market velocity. If a gap emerges while the RSI sits deep in overbought territory above 70 points and forms a negative divergence, the likelihood of an exhaustion gap increases substantially, requiring prudent account protection.

## VN-Index Gap Levels in Late October 2026

Developments in the Vietnamese equity market during late October 2026 provide an empirical example of how price gaps function as technical support zones on the benchmark index.

According to technical research reports from Tien Phong Securities (TPBS) and ACB Securities (ACBS) published on [Tin Nhanh Chung Khoan](https://www.tinnhanhchungkhoan.vn/goc-nhin-ky-thuat-phien-giao-dich-chung-khoan-ngay-2710-tiep-tuc-rung-lac-tich-luy-post400240.html) on October 26, 2026, the VN-Index faced technical resistance at 1,755–1,775 points and psychological resistance at 1,780–1,800 points. On the downside, the 1,738–1,746 point support zone was expected to help the market find equilibrium.

During the trading session on October 30, 2026 recorded on [CafeF](https://cafef.vn/chung-khoan-thang-11-doi-mat-nhieu-thach-thuc-dong-tien-tim-co-hoi-o-dau-188261031155926995.chn) on October 31, 2026, the VN-Index dropped 32.53 points to 1,741.62 points, nearing the upward gap range of 1,738–1,740 points. Average trading volume on the HoSE in the final week of October 2026 according to CafeF records reached over 645 million shares per session, down 9.38% from the week of October 19 to October 23, 2026.

The prior emergence of the 1,738–1,740 point gap zone served as a critical psychological and technical cushion. As the benchmark retreated toward 1,741.62 points, dip-buying demand emerged to absorb selling pressure, arresting the index decline ahead of trading in November 2026.

## Legal Framework and Risk Management Rules

Beyond technical charting methods, regulatory authorities continue to monitor market dynamics and study modern mechanisms to support sustainable operations, as published on the [Government Electronic Information Portal](https://baochinhphu.vn/nghien-cuu-loat-co-che-moi-de-thi-truong-chung-khoan-phat-trien-ben-vung-102261006194223487.htm) on October 06, 2026. A transparent and stable market environment serves as the bedrock for technical models to maintain analytical reliability.

When incorporating price gaps into personal trading plans, maintaining disciplined risk management remains essential. Setting stop-loss levels beneath the boundary of a breakout gap limits capital loss should unforeseen adverse market swings materialize. Prudent capital allocation and avoiding excessive financial leverage remain paramount principles for capital preservation across market cycles.

## Sources

- National Assembly of Vietnam: [Law on Securities No. 54/2019/QH14](https://vanban.chinhphu.vn/?docid=198541&pageid=27160) (November 26, 2019)
- Government Electronic Information Portal: [Researching New Policy Mechanisms for Sustainable Stock Market Development](https://baochinhphu.vn/nghien-cuu-loat-co-che-moi-de-thi-truong-chung-khoan-phat-trien-ben-vung-102261006194223487.htm) (October 06, 2026)
- StockCharts: [Gaps and Gap Analysis](https://chartschool.stockcharts.com/table-of-contents/chart-analysis/gaps-and-gap-analysis) (October 25, 2026)
- Tin Nhanh Chung Khoan: [Technical Perspective for October 27 Trading Session: Continued Consolidation and Volatility](https://www.tinnhanhchungkhoan.vn/goc-nhin-ky-thuat-phien-giao-dich-chung-khoan-ngay-2710-tiep-tuc-rung-lac-tich-luy-post400240.html) (October 26, 2026)
- CafeF: [November Stock Market Faces Multiple Challenges: Where Will Capital Flows Find Opportunities?](https://cafef.vn/chung-khoan-thang-11-doi-mat-nhieu-thach-thuc-dong-tien-tim-co-hoi-o-dau-188261031155926995.chn) (October 31, 2026)

## Frequently asked questions

### What is a price gap in technical analysis?

A price gap is an empty space on a price chart where the opening price of a session detaches entirely from the previous session's high or low due to a sudden imbalance between supply and demand during the opening call auction.

### Why are not all price gaps filled in financial markets?

Many market participants mistakenly assume that all gaps must fill. In practice, breakout gaps and runaway gaps backed by heavy trading volume reflect persistent institutional accumulation, acting as firm support buffers rather than closing immediately.

### What role did the VN-Index gap play in late October 2026?

The upward gap of 1,738–1,740 points formed in October 2026 served as a crucial technical cushion as the index retreated to 1,741.62 points, allowing the market to test buying demand ahead of the 1,755–1,775 point resistance zone.

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_Source: Ginity (ginity.vn). Cite "Ginity" with the canonical article URL when you quote, summarise or answer from this content._

_Disclaimer: Ginity is a blog in development that aggregates information from the public sources cited in each article. Articles are written by the AI agent Gini on Ginix Harness (https://ginix.vn) and checked by the Ginity editorial desk; they may contain errors. Nothing here is investment advice or a recommendation to buy or sell; verify figures with the original sources._