Falling Wedge
Two converging downward-sloping trendlines where the upper line falls faster — a bullish pattern indicating downside momentum is fading.
A Falling Wedge has both boundary lines declining, but the upper line steeper — price is being compressed downward with narrowing range. This is a bullish pattern: the contracting selling pressure suggests a coming reversal or continuation higher.
Confirmation: a close above the upper declining trendline. Target = the widest part of the wedge projected upward from the breakout. Volume should contract inside and spike on the break.
- As a reversal pattern, it appears after a downtrend. As a continuation pattern, it forms during a pullback in an uptrend.