Stock chart rising wedge11/21/2023 ![]() The subsequent price target is the low of the pattern itself (B) Trading example for the Rising Wedge chart pattern The first price target (D) in a downward breakout is generally taken to be the distance equal to the largest possible difference between the upper and lower trend line within the pattern itself (A > B). Going long based on this upward price breakout is highly speculative because the probability of an at least equally sharp decline is quite significant. When they do occur, these are usually extended moves with high momentum which usually occur at the end of a (strongly) rising trend (recognizable by the sudden considerable distance from, for example, the SMA20). The disadvantage versus the classic breakout is that if the initial move is strong and continues immediately you will be too late to jump on board Rising Wedge Breakout above the upper trendlineīreakouts above the upper trendline are not very common but they do exist. The advantage of this way is that from a risk/reward standpoint it usually yields the best setups. Retest of the initial breakout levelĪs with many other patterns, you can opt not to trade the initial breakout and wait for the price to retest the breakout level. If that happens, further downward movement is expected. Rising Wedge Breakout below the lower trendlineĭespite the fact that the pattern itself is created by a succession of increasingly higher bottoms and tops, this is a typical bearish reversal pattern and not a continuation pattern as is the case with the triangle formations, for example.Ī rising wedge assumes a breakout below the lower rising trend line (the trendline with the sharpest slope). To increase the reliability of the pattern, there must be at least 5 reversal points within the pattern, ignoring the exact starting point on the lower and upper trendlines. a lower rising trend line with a sharper slope than the upper one, representing the intermediate bottoms. ![]()
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