Wedge Pattern
A wedge pattern is a technical analysis charting pattern that is used to identify potential reversals in the price of a security. It is a trend line that slopes up or down and is characterized by converging trend lines that form a triangle-like shape. Wedge patterns can be either rising or falling, and they can be either bullish or bearish. A rising wedge is considered bearish and a falling wedge is considered bullish.
History of the Wedge Pattern
The wedge pattern was first identified by Charles Dow, the founder of Dow Theory, in the late 19th century. He used the pattern to identify potential reversals in the stock market. Since then, the wedge pattern has been used by technical analysts to identify potential reversals in the price of a security. The pattern is also used to identify potential breakouts and breakdowns in the price of a security.
Comparison Table
| Pattern | Slope | Direction |
|---|---|---|
| Rising Wedge | Upward | Bearish |
| Falling Wedge | Downward | Bullish |
Summary
The wedge pattern is a technical analysis charting pattern that is used to identify potential reversals in the price of a security. It is a trend line that slopes up or down and is characterized by converging trend lines that form a triangle-like shape. Rising wedges are considered bearish and falling wedges are considered bullish. For more information about wedge patterns, you can visit Investopedia, The Balance, and Investing.com.
See Also
- Head and Shoulders Pattern
- Double Top Pattern
- Double Bottom Pattern
- Triple Top Pattern
- Triple Bottom Pattern
- Flag Pattern
- Pennant Pattern
- Cup and Handle Pattern
- Symmetrical Triangle Pattern
- Ascending Triangle Pattern
