exhaustion gap

Exhaustion Gap

A gap that occurs after the rapid rise in a stock's price begins to tail off. An exhaustion gap usually reflects falling demand for a particular stock.

The image shows a gap at the end of a large upward movement, signaling a reversal.

Notes:

Many technical analysts consider it a temporary gap. The range in prices gapped by the decrease in demand is expected to be filled once demand and the upward pressure on price are re-ignited.

See also: Bear, Breakaway Gap, Bull, Gap, Runaway Gap, Technical Analysis

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exhaustion gap In technical analysis, a chart formation in which a gap in a price range occurs when a stock declines following a rapid rise. The exhaustion gap usually occurs on relatively low volume as demand, at least temporarily, falls off. Technical analysts generally believe that an exhaustion gap eventually will be filled when the stock resumes its upward push.

exhaustion gap