What is Rising Wedge Pattern?

The Rising Wedge pattern is a bearish chart pattern in technical analysis that signals a potential trend reversal from an uptrend to a downtrend. It is formed by a series of higher highs and higher lows, with the highs converging towards a resistance line at a steeper angle than the lows converge towards a support line. The pattern resembles a rising wedge and is thus named accordingly.

Traders typically identify the Rising Wedge pattern by drawing trendlines connecting the highs and lows. The pattern is confirmed when the price breaks below the support line on higher-than-average trading volume.

Traders often use the Rising Wedge pattern as a signal to sell, with a price target set based on the distance from the widest part of the wedge to the support line. It is important to note that not all Rising Wedge patterns will result in a trend reversal, and traders should use caution and consider other technical indicators and market factors before making any trading decisions based solely on this pattern.