My own example:
I kicked in his ass in retaliation for his bullying/he bullying me few days ago.
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I'm not sure what you're asking here, because a gerund is a noun. But yes, it's typical to use a gerund in this context, because it's a noun that describes an action, and you are taking an action in retaliation.
The grammar in your example isn't quite right, thought (the gerund itself is fine but there's a few other issues:
Any of the following would express the idea you want:
I kicked his ass in retaliation for him bullying me few days ago.
I kicked his ass in retaliation for his bullying of me a few days ago.
I kicked his ass in retaliation for bullying me a few days ago.
Of course, you don't need to use a gerund here, you could use any noun that made sense, e.g.:
I kicked his ass in retaliation for his actions a few days ago.