Introduction to Chart Patterns

Rising Wedge

By March 17, 2016 December 1st, 2018 No Comments

Back to “Technical Analysis Guide”

Tricky To Confirm

Unlike fundamental analysts, who rely on their knowledge of societal factors to gauge public demand for a certain commodity, technical analysts rely instead on evaluations of a stock’s past performance and price points. Examining this information in the form of patterns like the rising wedge allows them to notice trends in the way that a certain stock behaves, which in turn allows them to make educated predictions about how the stock is likely to act again in the future. Although it’s impossible to see the future, these charts and patterns are the best tool that traders have to make decisions that will profit them in the days ahead..

The rising wedge is the inversion of the falling wedge pattern, and both can be considered to be reversal or continuation patterns. Reversal patterns take place at the tail end of a sustained trend, which can be either a rise or a fall in price over the course of months. When the trend has been an increase of price, the wedge will start at the highest point and move downward. When the trend has been a decrease in price, the wedge will start at the lowest point and move upward. .

Spotting the rising wedge can be a very difficult price chart pattern for investors to accurately recognize and trade. Although this wedge can be considered consolidation formation, it typically includes upside momentum on each successive high, which can give the illusion that it is actually bearish. It is the final break of support that will indicate to the savvy investor that the forces of supply are finally victorious and lower prices are most likely on the horizon.