Wedges: Rising and Falling

A wedge is similar to a triangle, but both sides slope in the same direction.

• Rising wedge — both sides rise but narrow. Often bearish (either as a reversal at the end of an uptrend or as a continuation within a downtrend).
• Falling wedge — both sides fall and narrow. Often bullish.

Execution

• Trigger: a close through the side of the wedge opposite to its slope.
• Stop: beyond the last swing inside the wedge.
• Target: the widest height of the wedge from the breakout point; some traders target the start of the wedge.

Key points

• Rising wedges lean bearish, falling wedges lean bullish — but still wait for the breakout.
• Declining volume/momentum during the wedge strengthens the pattern.