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.
Related patterns
Pregunta a Drogo: