Wedge Pattern

A wedge pattern is a chart formation created by two converging trendlines that both slope in the same direction — either upward (rising wedge) or downward (falling wedge). This distinguishes wedges from triangles, where at least one trendline is flat or the lines slope in opposite directions. A rising wedge (both lines slope upward with the lower line steeper) is bearish — it shows that while price is making higher highs and higher lows, the momentum is weakening as the range narrows, typically leading to a downward breakout. A falling wedge (both lines slope downward with the upper line steeper) is bullish — price makes lower highs and lower lows with decreasing bearish momentum, leading to an upward breakout. Wedges can appear as reversal patterns (at the end of a trend) or as continuation patterns (within a trend, the wedge slopes against the prevailing direction). Volume typically decreases during the wedge formation and increases on the breakout. The measured move target is calculated by measuring the widest part of the wedge and projecting it from the breakout point.