Wedges

The wedge chart pattern can be either a continuation or reversal pattern.

It is similar to a symmetrical triangle except that the wedge pattern slants in an upward or downward direction, while the symmetrical triangle generally shows a sideways movement.

The other difference is that wedges tend to form over longer periods, usually between three and six months.

However, at the most basic level, a falling wedge is bullish and a rising wedge is bearish.  

In Figure, we have a falling wedge in which two trendlines are converging in a downward direction.

If the price was to rise above the upper trendline, it would form a continuation pattern, while a move below the lower trendline would signal a reversal pattern.

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