What Nvidia’s AI Breakout Teaches About Gaps That Hold
See how Nvidia opened far above its previous range—and why the market did not immediately fill the gap.
2 min read
A price gap does not have to close
A gap appears when a stock opens above or below the previous day's trading range. No regular session trades connect the two areas on the daily chart. Traders often talk about a gap being “filled,” meaning price later returns through that empty area. That can happen, but it is not a rule.
What can you see before pressing Play?
Nvidia was already rising before May 25, 2023. On this split-adjusted chart, price climbed from about $14 in January to a May 24 close of $30.541. Split adjustment means the older prices were divided to account for Nvidia's later stock split, making past and current candles comparable.
The final candle before Play has a high of $30.607. Before revealing the next day, ask: if Nvidia opens far above that high, must price return to $30.607 before the session ends?
The entire day stayed above the old range
Nvidia's May 24 results included an $11 billion revenue outlook for the next quarter. On May 25, the stock opened at $38.523. It traded between $36.635 and $39.48 before closing at $37.97.
Even the day's lowest price stayed more than $6 above the previous day's high. The gap remained open for the whole session. Buyers and sellers had moved to a new price area after receiving new information. The old range was visible, but the market did not have to visit it that day.
Why this matters to a trader
Do not enter a trade only because you expect every gap to fill. First read the new candle and ask where buyers and sellers are trading now. A large gap can also make a nearby stop impractical, so wait when you cannot define the risk clearly. Our guides to reading a chart and when not to trade provide a simple framework.