Rising and Falling Wedges Chart Patterns - Global Market Astro

Global Market Astro takes its privilege in explaining the commonly observed chart pattern i.e. The Wedge in this blog. Hope it gives a greater understanding to the readers and aids them in stock market trend analysis

THE WEDGE

The wedge is a type of chart pattern that signals the reversal of trend which gets formed within the wedge. These wedges serve as a chart pattern tool in stock market forecast. The wedges are similar to that of the Symmetrical triangle chart patterns formed by the support and resistance trend lines. The only way in which they differ from symmetrical triangle is they last for longer periods from three to six months. The trend lines of the wedge generally slant in either upward or downward direction, which makes them differ from the uniform trend lines of the triangles.

TYPES OF WEDGES

Based on the slant pattern of the trend lines, wedges are classified as

1-FALLING WEDGE - sloping downward

2-RISING WEDGE - sloping downward

FALLING WEDGE

The falling wedge is generally a bullish pattern which signals the upward price break through wedge and to move uptrend. The trend lines in this pattern get slanted and converge in downward direction as the price is moving downtrend. Here the price movement bounces between the trend lines, which bound the price movements.

The common thing to look in a falling wedge is that the upper or resistance trend line should exhibit a sharper slope than the lower or support trend line. The flat nature of support trend line shows that the selling pressure has dropped down making it tougher for the sellers to push the price downwards.

The price movement of a wedge should at least test both the support and resistance trend lines twice during the lifetime of a wedge. The more it tests at the resistance level the quality of the wedge is considered to be high.

The buy signal is indicated if the price breaks through upper resistance trend line. This breakout should be at higher volume but due to the long term nature it should be confirmed that the price has successive closes above resistance line.

RISING WEDGE

The rising wedge is a bearish pattern that signals a downward movement in security price. The trend lines of a rising wedge slant and converge in an upward direction. The price movement fluctuates between two trend lines. Once the price moves towards the apex, the momentum weakens. The traders would view for a move below the lower support line for a reversal in uptrend. The sellers start to gain momentum as the buyers’ strength weakens because of the inability of the buyers to take price higher. The pattern gets completed once the sellers take control of the stock when the price falls below support line

Source : https://www.globalmarketastro.com/blog/wedges-rising-and-falling/

Descending Triangle Chart patterns

This blog briefs about the Descending triangle chart patterns often observed in stock market trading.

DESCENDING TRIANGLE :

The descending triangle is the contrary of the Descending triangle. It signals the upcoming bearish trends in the market, suggesting the price would trend downwards over the completion of this pattern. This descending triangle is formed by a flat support line and a downward slope resistance line. Like the Descending triangle, this pattern is usually considered to be a continuation pattern, as it is headed by a downward trend line. But again, it can be found in an uptrend. 

The first part of this pattern is the fall to a low that then finds a support level, which sends the price to a high. The next move is a second test of the previous level of support, which again sends the stock higher – but this time to a lower level than the previous move higher. This is repeated until the price is incapable to hold the support level and falls below, continuing the downtrend. 

This pattern shows that buyers would take the security higher, butcontinue to face resistance. After several attempts to push the stock higher, the buyers fade and the sellers overpower them, which sends the price lower. 

Source : https://www.globalmarketastro.com/blog/descending-triangle-chart-patterns/

Ascending Triangle Chart Patterns – Stock Market

In this blog Global Market Astro explains another type of triangle chart pattern observed in market-Ascending triangle chart pattern.

ASCENDING TRIANGLE :

The ascending triangle usually signals that the price of the security is tend to raise higher towards completion. This pattern is formed as a result of two trend lines forming an apex. One is a flat trend line acting as a point of resistance and an ascending trend line acting as a support for price. Generally the price of the security oscillates between these two trend lines until it breaks out to the upper side. This pattern is usually preceded by an uptrend, making it a continuation pattern

In this chart, the price moves to a high that faces resistance leading to a sell-off to a low. It follows another move higher, which tests the earlier resistance level. When failing to move past this resistance level, the security again sells off – but to a higher low. This continues until the price rises above the resistance level or the pattern fails. 

The ascending support line gives an indication that sellers are beginning to leave the security. Once the sellers are knocked out of the market, the buyers can carry the price above the resistance level and resume the upward trend. The pattern gets completed upon breakout above the resistance level, but it can fall below the support line so be careful when entering prior to breakout.

Source : https://www.globalmarketastro.com/blog/ascending-triangle-chart-patterns/