Exhaustion gaps are those that happen near the end of a good up- or downtrend. They are many times the first signal of the end of that move.
In the attached chart, we can witness the clear uptrend followed by a Gap (exhaustion gap) and then the reversal of the trend.
Hi sir,
The above gap is not a exhaustion gap.
Here are the characteristics of Exhaustion Gap.
1. The Gap is created at the start of the day i.e. starting price is much higher than the previous day’s highest price but gets filled by end of the day with Red body.
2. Exhaustion gap appears after a significant rally i.e. similar to the runaway gap but it closes with red body
3. volume should be very high to change the trend.