A Rising Wedge is a pattern that forms during an upward move but often signals weakness and potential downside.
Despite rising prices, buying momentum is decreasing.
Structure:
๐น Higher Highs & Higher Lows
Price continues upward, but within a narrowing range.
๐น Converging Trendlines
The slope of the highs is weaker than the lows โ momentum is slowing.
๐น Breakdown
Price often breaks below the lower trendline, leading to a bearish move.
Key Insight:
Rising wedges show buyers pushing price up with less power each swing.
They are especially bearish when they appear after a strong uptrend.
๐ Common near market tops
๐ Volume often contracts during formation
๐ Breakdown confirmation is essential
Price risesโฆ strength fades.
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