exhaustion gap

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Exhaustion Gap

In technical analysis, a gap on a chart representing a large difference in price between two succeeding trades after prices have been rising significantly. The second price is higher than the first. The exhaustion gap indicates that buying pressure is ending and the security in question will soon begin to decline in price.
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exhaustion gap

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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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Three types of gaps have forecasting value- breakaway, runaway and exhaustion gaps.
Sometimes an exhaustion gap is followed within a few days by a breakaway gap in the other direction, leaving several days of price action isolated by two gaps.