Figure 2: Continuation Gap & Exhaustion Gap

As shown in Figure 2, after Genting International had been awarded the Sentosa IR project, investors reacted positively and price gaps up on 11^th Dec 2006. In the same month, stock price continues to gap up as investors continues to savor the happy occasion and great expectations from the news. At the third gap up (exhaustion gap), it was observed that the volume was much higher. Investors should be cautious by now as this is a warning of a potential exhaustion gap and price consolidation is a possibility.