NorthWest Biotherapeutics Inc (NWBO)

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A similar unanswered question, this one pondered by a frustrated disc golfer.

“Why are trees?”

ChatGPT says:

Gaps on stock charts represent price jumps between consecutive trading sessions, and they must be filled to provide a more accurate picture of a stock's price movement for several reasons:

1. Market Psychology: Gaps often occur due to significant news or events, causing sudden shifts in market sentiment. Filling the gap can reflect a more balanced and rational market response, which can be useful for technical analysis.

2. Resistance and Support Levels: Unfilled gaps can act as support or resistance levels. Traders often look to these levels for potential price reversals. Filling the gap can help confirm or negate the significance of these levels.

3. Trend Continuation: Filling a gap can signal a continuation of the prevailing trend. Traders may use gap fills as a confirmation signal for their trading strategies.

4. Technical Analysis: Many technical indicators and chart patterns rely on historical price data. Gaps can distort these patterns and indicators, so filling the gap provides a more accurate basis for analysis.

5. Price Discovery: Filling gaps contributes to price discovery, helping traders and investors understand the fair value of an asset without being influenced by abrupt price jumps.

However, not all gaps are necessarily filled immediately, and some may remain unfilled for an extended period. It's essential to consider the specific circumstances and market conditions when analyzing gaps on stock charts.