Sometimes Stocks Gap Up on Good News

When a company surprises Wall Street with good news, often its stock jumps in price on very heavy volume. If a stock opens significantly above the close of the previous day and the current day's open, high, low and close are higher than the high of the previous day, there is a gap in the price chart.

For example, after announcing better than expected earnings, Intuitive Surgical (ISRG) gapped up.

After announcing better than expected earnings in October 2004 and again in October 2005, Google (GOOG) gapped up.

Green Mountain Coffee Roasters (GMCR) gapped up twice after announcing new contracts with retailers. The stock dropped after the second gap but it recovered.