Exhaustion Gap

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DEFINITION of '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.

Exhaustion Gap


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

INVESTOPEDIA EXPLAINS 'Exhaustion Gap'

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.

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    Learn potentially very profitable trading strategies traders use to take advantage of a market reversal after identifying ...
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    Understand the components of the exhaustion gap pattern, how and why it occurs, and how it can be used to create an effective ...
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