Exhaustion Gap Signals and Technical Analysis Principles for Utilizing Trends in this Gap


Exhaustion Gap Signals and Technical Analysis Principles for Utilizing Trends in this Gap
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11/28/2022



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Exhaustion Gap (Exhaustive) As the name implies, this gap occurs late in the movement. Let's say the gap occurs at the end of an upward movement. It will be a warning that Moving up in the past It's starting to run out. Or vice versa If the price has been declining for a long time and this gap has formed, there is a high probability. That the stock price will bounce up.


One difference between this gap and other types of gaps is that the exhaustion gap may or may not be closed, assuming the original price action was bullish. Does not mean The price has not dropped. But downturns are characterized by gaps (instead of continually falling prices), so they are indispensable. Not to mention island reversal, because after an exhaustion gap forms late in an uptrend, prices tend to narrow above that gap (but only for a few days) before falling. In a downward breakaway gap. Therefore resembles an island surrounded by water which indicates a change in direction of movement of the price has already occurred (In this case, from the original uptrend) However, the significance of that direction change must be considered along with the trend and pattern as well because of the importance of each thing. May be complementary or counterproductive.


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