A downward trend has met a support level.
Upon reversal to fill gap
Just below reversal point
38% retracement level
Proceed to Continuation Gap...
Exit at 38% level (unless gap is supported by additional chart patterns)
*For a short trade on an Exhaustion Gap, invert the chart and trading strategy.
"Exhaustion gaps develop at the end of a move. ...An exhaustion gap is usually quite significant , since it mark the termination of an intermediate trend."
Martin Pring
Introduction to
Technical Analysis
"...the exhaustion gap occurs at the end of a move. Exhaustion gaps are differentiated from measured gaps by observing what price does after the gap forms. If it reverses to move into the zone of the gap, you probably have exhaustion."
Ed Downs
7 Chart Patterns That
Consistently Make Money