Description
Exhaustion Gap appears at the end of the trend and is accompanied by large trading volume. It signals that the share cannot handle the momentum of the price increase anymore. It is easy to confuse it with the runaway gap. One must observe the trading volume to avoid such mistake. The gap is quickly filled by the trend reversal. The trading volume remains large after the gap. Exhaustion Gap is not an obvious trend reversal signal, but at least a consolidation period is expected afterwards. Exhaustion Gap counts as a selling signal. Selling should be executed on the next trading day after the gap.
- Role: Neutral
- Expected trend: Neutral
- Previous tren: Neutral
- Reliability: Low
- Pattern: Gap
Exhaustion Gap Example
