Exhaustion gaps are the gaps which occur at the end of a strong up or downtrend. These gaps are the first signal that the prevalent move (down or up) is approaching to an end. They are many times the first signal of the end of that move.They are identified by high volume and large price difference between the previous day's close and the new opening price. They can easily be mistaken for runaway gaps if one does not notice the exceptionally high volume.Following a long down-trend these gaps materialise due to a bout of panic and pessimism. These gaps symbolize high selling pressure and liquidating of entire holding as investors suddenly lose hope. Equally in an uptrend or bull run, the stock price jumps up with a very high demand for the stock. The exhaustion gaps are filled quickly as the stock price reverses its trend after these gaps. Profit booking happens when exhaustion gap occurs in an up-trend and fresh buying emerges in a down-trend as investors believe that the trend has run its course.