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Rising wedge

A pattern where both highs and lows rise but the highs rise more slowly, so the range narrows as price climbs, usually read as bearish.

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.

Price keeps making new highs, but each advance is smaller than the last while pullbacks stay shallow. The two converging boundaries slope upward. The interpretation is that demand is weakening even though price is still rising.

In an uptrend a rising wedge is treated as a possible exhaustion; in a downtrend it is treated as a continuation-pattern, the rising drift being a corrective bounce. Completion is a close below the lower boundary.

Wedges are among the most subjectively drawn patterns, and the rising wedge in particular gets called on any orderly advance by traders who want to be bearish. Requiring at least two touches on each boundary, and a close below with follow-through, filters out a lot of wishful drawing.

Related: falling-wedge, broadening-formation, symmetrical-triangle, reversal-pattern, trendline

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