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Ascending wedge
A Wedge Chart Pattern is a familiar technical chart formation that depicts a narrowing price range over time.
Ascending Wedge in an Uptrend-bearish occurs when the slope of price candles’ highs and lows join at a point forming an inclining wedge. The slope of both lines is up with the lower line being steeper than the higher one.
With the ascending wedge the two boundary lines move upward with the lower line having the steepest angle of ascent. This formation will normally resolve downward because the steepest angle of ascent is usually the least sustainable. The chart below has two excellent examples.
Ascending wedges typically result in a downside breakout, and descending wedges typically terminate with upside breakouts. However, the reversal tendency often ties back to the prevailing trend formation. If the prevailing trend was upward and the wedge is descending, then a continuation will most likely happen. In other words, if the wedge direction is opposite to the prevailing trend, a continuation is in order, and if in alignment, then a reversal is to be expected. The target for a reversal pattern is calculated from the highest peak to the lowest trough in the wedge pattern. The widest portion of the wedge typically determines the size of the breakout.
The wedge breakout occurs most often in the third part of the total length of the wedge. However, the price might go all the way to the very end of the wedge. This is one of the differences from the symmetrical triangle. Wedges take less time to form in downtrends than in uptrend.
Descending wedge
The descending wedge is the opposite of the ascending wedge. The two boundary lines move downward and the upper line has the steepest angle of descent(see also 2B reversal pattern). This formation will normally resolve upward because the steepest angle is usually the least sustainable.