Gap Down Candlestick Pattern: The Gap That Started Boeing's 2020 Crash and Intuit's 2026 Slide

On February 24, 2020, the day the Dow fell 1,031 points as the coronavirus spread outside China, Boeing opened 3.1% lower and never traded back up to the previous day's low. Sold at that close with a stop above the gap day's high, the trade risked 1.2%. By March 20, 2020 the stock was down 70.1%, its lowest close since 2013.

On January 14, 2026, in the week a new AI tool set off a sell-off in software stocks, Intuit gapped down. That trade risked 4.6%. By April 10, 2026 Intuit was down 38.1%, with no gap down of 5% or more along the way.

A gap down is sellers dumping stock before the market opens, and a gap that holds says they meant it. Neither stock has traded back into its gap since. Here is how to read a gap down, where the stop goes, and how to find the next one.

What the fall cost#

A gap down is a sell signal for holders and an entry for short sellers.

The $10,000 and reward rows use the 120-session numbers. Prices are split-adjusted, as on the chart.

The gap down in one table#

A gap down is a day whose whole range, its high included, sits below the prior day's low. Nothing traded in between, so the chart shows empty space between the two candles: the gap.

These are the rules the VCP Scanner terminal uses to name a gap down on a daily chart.

A gap that opens low and then trades back into the prior day's range is not a gap down, however big the drop at the open was. Both of these gap days closed under their opens, Boeing's by 2.10 and Intuit's by 24.39, and neither filled its gap.

The gap down and its look-alikes#

A bearish kicker is often a gap down too, and the terminal names the kicker first. A gap day with a long red body and no shadows is also a bearish marubozu, and then the terminal names the gap down first. Neither Boeing's nor Intuit's gap day had another name. The mirror image is the gap up.

Example 1: Boeing (BA) on the first day of the COVID crash, Feb 24, 2020#

Open BA in the VCP Scanner terminal →

Over the weekend, cases had jumped outside China. The Dow fell 1,031 points, or 3.6%, its biggest loss in two years, and the S&P 500 fell 3.4%. Boeing's 737 MAX was still grounded, and the airlines that buy its planes stood to lose the most from a slump in travel.

What followed:

• Next session (Feb 25): closed at 304.14, down 4.3%, its first close below the gap day's low of 316.33. Its high that day, 320.64, is the highest Boeing has traded since.
• Ten sessions later (Mar 9): 227.17, −28.5%.
• Mar 20, 2020: 95.01, −70.1%, its lowest close since May 13, 2013. That is 58.0 times the 3.84 risked on each share.
• The gap was never filled. On Nov 6, 2026 Boeing closed at 173.40, 45.5% below the gap day's close.

This was a crash, and gaps did a large share of it: four gaps down of 9% to 20% did about half the fall to March 20, and one gap up, on March 13, gave back about a tenth.

With $500 at risk, the 3.84 stop sized a short at 130 shares, about $41,327. A tight stop makes a big position. At the Mar 20, 2020 close the short was up $28,976.

Example 2: Intuit (INTU) in the software sell-off, Jan 14, 2026#

Open INTU in the VCP Scanner terminal →

Two days earlier, Anthropic had released Claude Cowork, an AI tool that revived fears that AI agents would replace software makers' products. Intuit had already lost 4.7% the day before the gap. It fell 16% that week, its worst week since 2022, and one analyst wrote that many investors saw "no reasons to own software".

What followed:

• Next session (Jan 15): closed at 554.58, down 2.1%, its first close below the gap day's low of 556.66. Its high that day, 571.34, is the highest Intuit has traded since.
• Ten sessions later (Jan 29): 502.98, −11.2%.
• Apr 10, 2026: 350.94, −38.1%, its lowest close since Nov 25, 2020. That is 8.3 times the 26.06 risked on each share.
• Jun 25, 2026: 255.07, −55.0%, its lowest close since Apr 21, 2020. That is 12.0 times the risk.
• The gap was never filled. On Nov 6, 2026 Intuit closed at 341.50, 39.7% below the gap day's close.

No gap down of 5% or more came before April 10: Intuit fell 38.1% one session at a time. Over the 120 sessions, three gaps did about two-fifths of the fall. The biggest, on May 21, the morning after Intuit's fiscal third-quarter report and a 17% staff cut, was about a quarter on its own.

With $500 at risk, the stop sized a short at 19 shares, about $10,765. At the Jun 25, 2026 close the short was up $5,919.

Where a gap down counts: key levels#

A gap down at a level turns a test of that level back down. In the terminal, the Only at a key level switch is on by default and keeps the gap downs at one of these:

Neither example sat on one of these levels. To see gap downs like them, turn Only at a key level off.

Both stocks were in Stage 4, Stan Weinstein's declining stage, where the stock trades below a falling 30-week average. Both gaps started the next leg down.

How to trade a gap down#

1. Find the gap. Most come on news: an earnings report, a forecast, a policy change, a market-wide sell-off. Boeing's came on the virus spreading, Intuit's on fears about AI.
2. Check that it held. The gap day's high must stay below the prior day's low. A big drop at the open that trades back into the prior range is no gap down.
3. Choose your entry. Some traders sell the gap day's close. Others wait for a close below its low. Boeing and Intuit both gave that close the next session.
4. Put the stop above the gap day's high. The terminal draws it there. If price trades back into the gap, the gap has failed and you are out.
5. Size from the stop. Shares = money at risk ÷ (stop − entry). With $500 at risk on Intuit: 500 ÷ (592.66 − 566.60) = 19 shares.

A short carries more risk than a long: a stock can gap up past the stop overnight.

Find gap downs on any chart in VCP Scanner#

• Open a stock in the terminal, for example BA or INTU.
• Open Candles in the chart toolbar and tick Gap down.
• Only at a key level is on by default. Turn it off to see every gap down on the chart.
• The chart jumps to the latest gap down. A dot marks each one above its high, and the selected one shows its stop on the price scale.
• The inspector lists the close, stop, risk to stop, level, volume and stage, and the bar's other names under Also. Walk through the others with the ← and → keys.
• Mark the ones you care about with the drawing tools. The arrows in the charts above are the Arrow Marker (Alt+A): click where the arrow starts, then click the candle.

Candles are free, on daily, weekly and monthly charts.

Bottom line#

• A gap down is a day whose whole range sits below the prior day's low. The gap holding is the signal, not the gap day's colour.
• Boeing's on the first day of the COVID crash and Intuit's in the 2026 software sell-off risked 1.2% and 4.6%. Boeing fell 70.1% within 20 sessions, Intuit 38.1% within 60.
• The gap day's high is the stop. It defines your risk before you take the trade.

Data: VCPScanner daily market data through Nov 6, 2026, split-adjusted. The examples are for education, not recommendations.