WEDGE FORMATION
1 June 2016 By PDSNETA pattern in which two converging trend lines connect a group of price peaks and troughs. Very similar to the triangle formation, the wedge is considered to be a longer term signal occurring anywhere between three and six months. In the case of a triangle, support and resistance trendlines are either both sloping towards each other (symmetrical triangle), or one of either is horizontal (ascending and descending triangles). The trendlines in a wedge are always sloped, and both are sloped in the same direction - either upwards or downwards. The break out direction of a wedge is usually much more predictable than with a triangle and is considered a reversal signal as opposed to a continuation signal (in the case of a triangle). There are two types of wedges - bullish and bearish.
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