Exhaustion Gap

Exhaustion gap - An exhaustion gap is a gap that occurs when a quick rise in prices starts to slow down. So the exhaustion gap represents a decline in the demand for these stocks that have been continually rising. For many analysts the exhaustion gap is just a temporary gap and it will disappear once the prices start to rise again. If you look at a chart showing the rising and falling of stock prices the area between a strong rise and a continuing fall would be the gap or hole that between the upward and downward movement. The exhaustion gap happens at an end of a prolonged period of movement in one direction, it is usually an indicator that a technical correction may be necessary.