Wedge (Wedge)

The wedge pattern is a recognizable technical analysis formation that resembles a narrowing triangle on a price chart.

It is characterized by converging trendlines that slant either upwards or downwards, creating a shape akin to a wedge. The two main types of wedge patterns are Rising Wedges, where the converging lines tilt upwards, and Falling Wedges, where they tilt downwards.

Rising Wedges are often considered bearish signals, suggesting a potential reversal to the downside, while Falling Wedges are viewed as bullish, indicating a potential reversal to the upside.

Traders closely monitor wedge patterns, which can serve as reliable indicators of impending price breakouts. The breakout direction, whether up or down, provides valuable insights into potential future trends and helps traders make informed decisions regarding entry and exit points in the market.

Dec 20, 2023