The price makes lower highs and lower lows. A descending wedge is typically forms between 3-6 moths period of time. There should be a prior trend to revers for the formation of a reversal pattern. Some characteristics to identify Descending wedge pattern are- (a) Prior downtrend: The falling wedge is a very common chart pattern and occurs (most of the time) in 5 waves (according to the Elliott Wave analysis). Thus, an ascending pattern always generates a sell signal (has a bearish bias). If it forms in an uptrend then it indicates the continuation of the downtrend. If it is formed at the end of a downtrend then it indicates potential trend reversal (uptrend). They formed when the price of the security fluctuates between downward sloping Support and Resistance line. The descending wedge can indicate both reversal or continuation of market trend depending on the specific market condition when it is formed.ДЄlso known as Falling wedge, or reverse wedge pattern. Descending wedge clearly has a bullish bias. The tip of the wedge is narrower than the bass of the wedge as the trading range contracts.

(f) Technical indicators can confirm overbought signal: oscillators, RSI- these indicators can confirm potential oversold signals for further confirmation. An increase in volume when price breaks the support line indicates bearish sentiment. Generally, volumes decline as the price rises and patterns evolve. (e) Observe the divergence of price action and volume for further confirmation: (d) Wait to confirmation until the price goes down under the most recent trough. More aggressive traders take trades at this level and defensive traders wait for further confirmation. Once the price breaks the support line the pattern complete. Hence, as the pattern progresses this causes the contraction of the trading range, creating a cone-like shape pointing upward. The slopes of the support are more stiffer than the resistance. Both the resistance and the support line are slopping upward. The reaction highs form the upper resistance line and the reaction lows form the lower support line. The price makes higher high and higher lows.

A rising wedge typically forms between 3-6 months.

There should be a prior trend to reverse for the formation of a reversal pattern. Some characteristics to identify Ascending wedge pattern are-вЂ“ (a) Prior uptrend: The rising wedge is a very common chart pattern and occurs (most of the time) in 5 waves (according to the Elliott Wave analysis). There have some other reversal chart patterns. If it forms in a downtrend then it indicates the continuation of the downtrend. If it is formed at the end of an uptrend then it indicates potential trend reversal (Downtrend). Ascending wedge clearly has a bearish bias.ДЄscending wedge can indicate both reversal or continuation of market trend depending on the specific market condition when it is form. The top of the wedge is narrower than the bottom of the wedge as the trading range contracts. Wedge patterns signal either continuation or reversal in the market trend depending on the specific market condition.ДЄlso known as Rising wedge, formed when the price of the security fluctuates between upward sloping Support and Resistance line. A wedge pattern (rising or falling) indicates a pause in the current trend.