The wedge continuation pattern combines some of the characteristics of the triangle and the pennant formation. It has taken the shape and development time of the triangle continuation pattern. On the other hand, it resembles the behavior and appearance of the pennant, but without a pole.
The wedge continuation pattern has a distinct slope. The price breakout occurs in the opposite direction of the slope of the wedge and yet, in a similar direction as the one of the original trend.
Bullish Rising wedges are small continuation patterns that represent brief pauses within an already existing uptrend. They are characterized by converging trend lines and have a definite bullish bias(see also rectangle pattern). They are similar to bullish pennants except where pennants are generally flat, wedges have a definite slant against the overall trend.
Technical targets for rising wedges are derived by subtracting the height of the pattern from the eventual breakout level.
Bearish Wedges appear in the middle of a large fall or immediately after a market has broken down from a substantial rally.