Chartered Market Technician Practice Exam 2025 – Complete Prep Guide

A runaway gap typically indicates a continuation of the trend because it occurs during strong market momentum, often accompanied by increased volume. This type of gap signifies a rapid price movement and suggests that the current trend is likely to persist. The breakout resulting in a runaway gap is perceived as a strong signal that the buyers or sellers are still actively driving the market in that direction.

Runaway gaps often appear in the middle of trends, distinguishing them from other types of gaps such as exhaustion gaps, which signal a potential reversal of the trend. Recognizing a runaway gap can empower traders to make informed decisions based on the likely continuation of market dynamics, reinforcing confidence in holding positions in the prevailing direction.

The other options do not typically indicate a continuation of the trend in the same way. For example, a morning star pattern suggests a potential reversal from a downtrend, while an inverted hammer can imply a potential bullish reversal after a downtrend. The Tasuki gap bullish formation also typically follows a bullish price trend but is more specific to continuation scenarios involving specific candlestick patterns rather than a broad representation of general price behavior.