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Falling wedge

A pattern where both highs and lows fall but the lows fall more slowly, so the range narrows as price declines, usually read as bullish.

Rising and falling wedgesTwo charts, each bounded by a pair of trendlines that slope the same way and slowly close in on each other.Rising wedgebreaks downtwo rising lines, convergingFalling wedgebreaks uptwo falling lines, convergingA wedge tilts with the move but keeps narrowing.
Rising and falling wedges. A wedge is two trendlines that slope the same way while closing in on each other. In the rising wedge here price leaves through the lower line, and in the falling wedge it leaves through the upper one.

The mirror of rising-wedge. Price makes lower lows, but each new low is barely lower while the bounces stay contained. Selling pressure is fading even though the chart still points down.

It resolves on a close above the upper boundary, often with a sharp move because the pattern compresses volatility before it breaks. In a downtrend it is a potential reversal; in an uptrend it is a continuation-pattern after a pullback.

Like all wedges, it depends on how the lines are drawn and is easy to see in hindsight. Pair it with something independent, such as volume-dry-up into the apex or a hidden-divergence, rather than trading the shape alone.

Related: rising-wedge, volatility-contraction-pattern, continuation-pattern, trendline, hidden-divergence

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