What is a rising wedge pattern?

The Rising Wedge (also known as the ascending wedge) pattern is a powerful consolidation price pattern formed when price is bound between two rising trend lines. It is considered a bearish chart formation which can indicate both reversal and continuation patterns – depending on location and trend bias.

What is a wedge in trading?

What Is a Wedge? A wedge is a price pattern marked by converging trend lines on a price chart. The two trend lines are drawn to connect the respective highs and lows of a price series over the course of 10 to 50 periods.

What are wedge shaped trend lines?

Wedge shaped trend lines are considered useful indicators of a potential reversal in price action by technical analysts . Wedge patterns are usually characterized by converging trend lines over 10 to 50 trading periods. The patterns may be considered rising or falling wedges depending on their direction.

What is a falling wedge chart pattern?

The falling wedge chart pattern is a recognisable price move that is formed when a market consolidates between two converging support and resistance lines. To form a descending wedge, the support and resistance lines have to both point in a downwards direction and the resistance line has to be steeper than the line of support.