FTSE350 Trade: HWDN
Breakaway gaps are usually seen after a market reversal and are a confirmation of the new trend. The heavy volume also adds weight to the move, and the gap itself is an ideal place to put your stop-loss.
Although I missed the original gap I believe there may still be an opportunity to go long as a 2nd gap has now appeared (also on a heavy volume day). Runaway gaps have a tendency to appear around the middle of a trend, which in turn allows us to project a likely profit objective – runaway gaps are also called measuring gaps for this very reason.
It’s a shame I didn’t see this sooner as Friday would have allowed for a much tighter reward to risk – but even setting a buy stop order above the Friday high, with stop beneath 111.7 will allow potential for a 3:1 reward to risk trade.