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Falling & Rising Wedge

The document discusses falling and rising wedges, which are reversal patterns in technical analysis. A falling wedge is a bullish pattern where reaction highs and lows converge within a downward sloping cone, contracting over time. A rising wedge is a bearish pattern where prices move higher within an upward sloping contracting range, going against the prevailing trend. Both patterns form negative divergences and see a break of the resistance or support line on high volume, indicating a change in trend.

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Ayesha Mariya
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51 views

Falling & Rising Wedge

The document discusses falling and rising wedges, which are reversal patterns in technical analysis. A falling wedge is a bullish pattern where reaction highs and lows converge within a downward sloping cone, contracting over time. A rising wedge is a bearish pattern where prices move higher within an upward sloping contracting range, going against the prevailing trend. Both patterns form negative divergences and see a break of the resistance or support line on high volume, indicating a change in trend.

Uploaded by

Ayesha Mariya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Falling & Rising

Wedge
Lecture 26
Wedge (Rising & Falling)
• The Falling Wedge is a bullish pattern that begins wide at the
top and contracts as prices move lower.
• This price action forms a cone that slopes down as the
reaction highs and reaction lows converge.
• The Rising Wedge is a bearish pattern that begins wide at the
bottom and contracts as prices move higher and the trading
range narrows
• As a reversal pattern, the rising wedge will slope up and with
the prevailing trend. Regardless of the type (reversal or
continuation), rising wedges are bearish.
Falling Wedge (Reversal Pattern)

Price moves
Prior Trend between resistance
(Downtrend) & lower support
line

Price create a new


Contraction is with
low with
low volume
Contraction

Volume & Price


Resistance Breaks
create negative
with high volume
divergence
Rising Wedge (Reversal Pattern)

Price moves
Prior Trend between Rising
(Uptrend trend) resistance &
support line

Price create a new


Contraction is with
High with
low volume
Contraction

Volume & Price


Support Breaks with
create negative
high volume
divergence

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