EXHAUSTION BAR
What does it look like?
A bullish exhaustion bar opens with a gap down. Then, it works its way up to close near its top.
A bearish exhaustion bar opens with a gap up before moving down to close as a bearish bar.
In both cases, the gap remains unfilled. Also, high volume should occur with the exhaustion bar.
What does it mean?
Its name explains it all. It represents exhaustion and a failed last-ditch attempt.
After the bears are exhausted, the bulls will take over, and the market will rise.
After the bulls are exhausted, the bears will take the market down.
How do we trade it?
- Buy above a bullish exhaustion bar
- Sell below a bearish exhaustion bar
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