@ram1984
Contrary to other responses, I know a thing or two about technicals and hence would give a specific reply. 
Gaps as the name suggest are the areas where trading has not happened. e.g today a stock closed at rs 100 with intra day high of 101. If tomorrow stock opens at 103, goes up to 105, makes a low of 102 and closes at 103, then effectively no trading has happened in the region between 101 and 102 . That is described as a gap up.
Now there are different types of gap.
First is the common gap which is not of much significance. It happens due to price adjustments to ex dividends, or demergers, or any other reason and donât have much significance.
The most important gap is the breakaway gap. This happens when a stock breaks out of a tight consolidation area. This consolidation can be in the form of a flag, range bound consolidation, triangle etc. Any form of consolidation before a strong upmove which can begin with a gap up and huge volumes. This type of gap is usually not filled up in a hurry.
Runaway gap (which according to me is a continuation gap ) is a gap in an ongoing strong upmove. This happens when because of fear of missing out, sometimes traders buy well above previous dayâs high in response to results, news, or Whatsapp gyaan these days. These type of gaps might get filled up after a period of time when there is some headwind to the stock price.
Finally there is the exhaustion gap, which happens at the fag end of a bull run and is promptly filled up within a few days. This often (not always)signals a maturation of upmove. Sometimes it is often a pause where on a day stock price gaps up, and in next few days stock corrects to fill up the gap and upmove resumes.
In case of Laurus, there are various gaps which we will list below.
On 31 july 2020, stock price gapped up between 160-163. with huge volumes. This looked like a breakaway gap, although there was not too much range bound consolidation before that. Immediately on next trading day, on 3 august 2020, price gapped up between 189 and 191 which again seems to be breakaway gap. Both these gaps remain unfilled till day.
On 14 Sep 2020, price gapped up between 254 to 256 and this had the hallmarks of an exhaustion gap. On 18 Sep 2020, another exhaustion gap was seen between 285 and 288 which also got promptly filled up. Both these gaps indicated maturation and exhaustion of the upmove and now it seems the stock is working hard to try to go up. I had also mentioned the dark cloud cover pattern on candlestick earlier also.
Coming to overall picture, stock price formed a high of 310 before the split. Post split it formed a lower high of 307. Interim low is at 251. This level for anyone following technicals becomes a crucial level as a stop loss. If stock price breaks down below and sustains below 251, then it can correct further. So I guess anyone holding Laurus and wants an appropriate stop loss to follow, it should be 250 or below which is the most recent swing low.
Whether the stock corrects and reaches the unfilled gaps is difficult to tell. I think both were runaway gaps and might not be filled soon unless a big negative event/newsflow happens.
⌠uptil now itâs not broken it and overall it still looks stable and undervalued. However, do you think itâs time to cut my losses and move on or do you feel it still has huge potential considering the agriculture tailwinds? Everything looks good apart from the audit overhang, however, due to the audit Iâm finding it difficult to average down at its current price. So Iâm a bit stuck with it ATM. Technically and fundamentally it looks brilliant⌠but the Audit overhang is playing against my conviction so I wanted your thoughts on it if possible. cheers.