The pattern is characterized by squeezing the price from below. The formation of an ascending triangle pattern on the chart warns traders of an imminent upward impulse breakout. A common stop level is just outside the wedge on the opposite side of the breakout. The ascending triangle chart pattern came to us from Western technical analysis. The target can be estimated through the technique of measuring the height of the back of the wedge and extending it in the direction of the breakout. These wedges tend to break upwards.Ĭonservative traders may look for additional confirmation of price continuing in the direction of the breakout. In other words: the highs are falling faster than the lows. The second is Falling wedges where price is contained by 2 descending trend lines that converge because the upper trend line is steeper than the lower trend line. In other words: the lows are climbing faster than the highs. The first is rising wedges where price is contained by 2 ascending trend lines that converge because the lower trend line is steeper than the upper trend line. Others arent common, like megaphone pattern stocks. This is just a little above the bull flag price target of 20.83 (15.14 + 5.69). Some stock chart patterns happen all the time, like ascending triangles and wedges. Unlike the ascending and descending triangle, rising and falling wedges are reversal patterns. Here you see how, after the breakout from the bullish flag pattern around 15.14, prices moved up to a high of 20.97 before retracing. Rising and falling wedges are similar to ascending and descending triangles, except both the upper and lower lines are sloped in the same direction (but are still converging). To avoid confusion, you need to watch the behavior of the price once the pattern is completed. An ascending triangle has a flat top and a curved bottom, while a rising wedge has a sloping top and bottom. The shape of the two patterns is also different. There are 2 types of wedges indicating price is in consolidation. This bullish flag played out as expected, which may not always happen. An ascending triangle has a bullish direction, while a rising wedge has a bearish direction. It is formed by two diverging bullish lines. The ascending triangle pattern is what I would like to call a classic chart pattern. An ascending broadening wedge is a bearish chart pattern (said to be a reversal pattern). It is literally the opposite setup of the descending triangle. The pattern is a continuation pattern of a bullish event that is taking a breather as the security attempts to climb higher. With this pattern, the market is rising, making higher highs and higher lows as expected. It consists of two slanted trend lines that contract the price towards a vertex. The Wedge pattern can either be a continuation pattern or a reversal pattern, depending on the type of wedge and the preceding trend. An ascending triangle is just that, a triangle that’s on the rise. The Rising (or ascending) Wedge is a bearish reversal pattern (however, it can act as a continuation set-up depending on formation).
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