Falling Wedge / 下降ウェッジ
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
A pattern where both highs and lows decline, but the upper trendline declines more steeply, causing the two trendlines to converge downward. At the bottom of a downtrend, it functions as a reversal pattern; during a pullback within an uptrend, it functions as a continuation pattern. In both cases, an upward breakout is expected.
Enter long when price clearly breaks above the upper trendline (resistance) on a closing basis. A volume increase at breakout is important to confirm.
Project the widest part of the wedge upward from the breakout point. Or target the price at the wedge formation's starting point.
Place a stop-loss slightly below the most recent low within the wedge.
Volume typically decreases gradually during formation. A volume surge at the upward breakout enhances reliability. Breakouts without volume may be false signals.