A breakaway gap is a significant price gap that occurs on a price chart, particularly in financial markets like stocks, currencies, commodities, and indices. It represents a substantial shift in the supply and demand dynamics of the asset being traded. Breakaway gaps are called "breakaway" because they tend to occur at the beginning of a new trend or a significant price movement, signifying a breakout from a previous trading range or trend.

These gaps are often characterized by a sudden and sharp price movement, creating a visible empty space or "gap" on the chart between the closing price of the previous period and the opening price of the subsequent period. Breakaway gaps are usually seen after a period of consolidation or when market sentiment shifts dramatically, leading to a surge in buying or selling activity.

Traders and analysts pay close attention to breakaway gaps because they can provide valuable information about the underlying market sentiment and potential future price movements. A breakaway gap to the upside (upward movement) may indicate a bullish trend, while a breakaway gap to the downside (downward movement) may signal a bearish trend.

However, it is essential to exercise caution while interpreting breakaway gaps as they may sometimes lead to false signals or get filled later on, especially in volatile or illiquid markets. Combining breakaway gap analysis with other technical indicators and chart patterns can enhance its reliability and assist traders in making more informed trading decisions.