Rising wedge

bearish · reversal pattern

A rising wedge is a bearish reversal pattern formed by converging upward-sloping trendlines, with the lower line steeper than the upper. Each successive peak is barely higher than the last, signalling exhaustion. A breakdown below the lower trendline confirms reversal.

Formation rules

Two converging upward-sloping trendlines
Lower trendline steeper than upper
Volume contracts as the wedge develops
Confirmation on close below lower trendline

How to trade it

Short on confirmed breakdown. Stop above the wedge's most recent peak. Measured target = wedge's height at its widest point projected below the breakout. Combine with a momentum divergence (RSI or MACD) for a higher-conviction entry.

Common pitfalls

Without volume contraction the pattern is unreliable
Strong primary uptrends frequently absorb wedges

Statistical context

Bulkowski: rising wedges break down ~69% of the time when accompanied by volume contraction; without volume the edge collapses.

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