Breakaway Gap

More technical analysis voodoo, a breakaway gap occurs when a stock makes a pronounced move against its recent trend, usually indicative of a new trend taking hold.

Paco, a former engineer in his hometown, has been using his downtime in a Texas detention facility to learn how to be a day-trader. He learned a very important lesson when he bought shares of CVS, which had been trending upward for the better part of the year-to-date.

However, shortly after his purchase, Amazon announced it was entering the pharmacy business, leading CVS and other retailers to experience a breakaway gap downward, as the prospects for the industry just worsened with news of this increased competition.