#Falling wedge pattern bearish series

The pattern is formed by two diverging bullish lines, with the upper line acting as resistance and the lower line as support. In an ascending broadening wedge, the pattern is considered bearish, suggesting a possible reversal to come. The pattern typically occurs after an extended price move up or down, and the price action “fans out” from the starting point, creating the shape of a broadening wedge.

#Falling wedge pattern bearish series

The pattern is formed by two diverging trend lines that connect a series of price peaks and troughs.īroadening wedges can be observed in different variations, such as ascending, descending, tops, and bottoms. It is considered a bilateral chart pattern, which means that it can signal both bullish and bearish market situations. The broadening wedge pattern is a unique chart pattern that traders can use to identify potential breakouts and short-term trend reversals. Broadening Wedge Pattern Understanding Broadening Wedge Pattern This pattern can take on various forms, such as sideways or ascending and descending fashions, offering a wide range of potential trade setups for traders to capitalize on and manage risk. In trading, the broadening wedge pattern can provide valuable insight into the exhaustion of buyers or sellers within a market, presenting traders with opportunities to identify potential trend reversals and implement effective trading strategies. Conversely, a descending broadening wedge demonstrates a downward leaning channel, indicating a potential bullish reversal. It is formed by two diverging bullish lines, with the pattern being confirmed upon observing good oscillation between these two upward lines.

The key characteristic of the broadening wedge pattern is the expanding price fluctuation, which is indicative of increasing price volatility.Īn ascending broadening wedge is a specific type of this pattern, where the widening channel leans upward and is considered a bearish signal. This pattern is often referred to as a megaphone pattern due to its shape, featuring two lines – one ascending and one descending – that diverge from each other. The broadening wedge pattern is a chart pattern recognized in technical analysis, used by traders and analysts to predict the potential future price movements within a specific financial market.