This pattern creates lower lows, but the new lows should become less in magnitude.This is usually a longer-term pattern that generally forms over a three to six-month timeframe but can also appear on shorter time frames.The bullish bias in this pattern will not be signaled until a breakout back above the descending resistance to show this is a reversal pattern from lows in price.This price action forms a descending cone shape that trends lower as the vertical highs and vertical lows move together to converge.The falling wedge is a bullish chart pattern that begins with a wide trading range at the top and contracts to a smaller trading range as prices trend down.The falling wedge has the potential to turn into a bullish pattern regardless of what kind of market it occurs in.When it is a reversal pattern, the falling wedge trends down when the overall market is in a downtrend but breaks to the upside. When it is a continuation pattern it will trend down, however the slope in the wedge will be against the overall market uptrend. The falling wedge pattern can fit in the continuation or reversal category.
The bullish wedge pattern shows price action falling in a downswing but breaks its descending upper resistance trend line to reverse higher into an uptrend.When it’s a reversal pattern, the rising wedge trends up when the overall market is in a downtrend. Less strength in highs indicate a decrease in the strength of buying pressure and should create an upper trend line of resistance with less ascending slope than the lower line of support. The new highs set in this pattern create higher highs, but the new highs should become less in magnitude.This is a longer term pattern that generally forms over a one to six month timeframe.The bearish bias in this pattern can’t be signaled until a breakdown of the ascending support to show this is a reversal pattern from highs in price.This price action forms an ascending cone shape that trends higher as the vertical highs and vertical lows move together to converge.The rising wedge is a bearish chart pattern that begins with a wide trading range at the bottom and contracts to a smaller trading range as prices trend up.The rising wedge is a bearish pattern regardless of what kind of market it appears in.When it’s a continuation pattern it will trend up, however the slope in the wedge will be against the overall market downtrend. The rising wedge chart pattern can fit in the continuation or reversal category. A wedge pattern generally forms and moves in the opposite direction of the longer term trend on a chart and shows a short term reversal that usually fails and the previous trend resumes. Wedge patterns can be continuation or reversal patterns depending on which way they breakout. A Falling Wedge is a bullish chart pattern that forms during an uptrend in price action with downward trend lines. A Rising Wedge is a bearish chart pattern that forms during a downtrend in price action that has upward trend lines.
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