Exhaustion Gap / 消耗型の窓
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
A gap occurring in the final phase of a trend, representing the trend's "last gasp." Often accompanied by heavy volume, it is characterized by a rapid price reversal after the gap. When the gap is quickly filled, it signals a trend reversal. It may also appear as part of an island reversal.
Enter in the direction opposite to the trend after confirming the gap has been filled. Short for top exhaustion gaps, long for bottom exhaustion gaps.
The nearest support/resistance line serves as the target. Or target the level of the most recent runaway gap.
Place a stop-loss slightly beyond the extreme after the gap (above the high for tops, below the low for bottoms).
Typically accompanied by very heavy volume (3 times normal or more). Heavy volume indicates that "all remaining buyers/sellers have participated."