Wedge Pattern
A Wedge is a chart pattern defined by two converging trendlines that slope in the same direction — either both upward (Rising Wedge) or both downward (Falling Wedge) — forming a narrowing price channel, historically observed as a reversal pattern when slope direction conflicts with the prior trend and as a continuation pattern when aligned with it.
The Wedge differed from other triangular patterns by the directional slope of its converging trendlines. Both the upper resistance line and the lower support line tilted in the same direction, unlike a symmetrical triangle where one sloped up and one sloped down, or an ascending or descending triangle where one line was horizontal. This shared tilt gave the Wedge its distinctive appearance and was the source of its analytical interpretation.
A Rising Wedge featured converging trendlines both pointing upward, with price making higher highs and higher lows but at a decreasing rate of progress — the highs were rising more slowly than the lows, causing the channel to narrow as it ascended. When a Rising Wedge appeared after a sustained uptrend, it was historically interpreted as a bearish reversal pattern, as the slowing advance within the wedge suggested diminishing buying conviction. When a Rising Wedge appeared as a counter-rally within an existing downtrend, it was treated as a bearish continuation pattern.
A Falling Wedge featured converging trendlines both pointing downward, with price making lower highs and lower lows but at a decreasing rate of decline. A Falling Wedge in a downtrend was historically studied as a potential bullish reversal signal — the slowing decline suggested sellers were losing momentum even as price remained in a downward trajectory. A Falling Wedge within an uptrend was typically treated as a bullish continuation pattern, representing a brief countertrend corrective phase before the prior trend resumed.
In the Indian equity context, Rising Wedges were commonly identified by technical analysts on daily and weekly charts of indices and individual stocks during late-stage bull market phases. The Indian market's multi-year rally phases were occasionally interrupted by Rising Wedge formations on weekly Nifty charts, where the index continued to print new highs but with visibly narrowing momentum — each rally brought smaller incremental highs relative to the prior swing. Such formations were highlighted in technical research as cautionary structural evidence.
Falling Wedges in Indian bear market phases attracted attention as potential bottoming patterns. The compression of downside momentum as the wedge narrowed, especially when accompanied by declining volume on the selling bars and improved RSI readings on each successive lower low (positive divergence), was studied as multi-indicator evidence that the bear trend was exhausting. Breakouts from Falling Wedges to the upside — particularly on high volume — were among the more reliable early signals of trend reversal that practitioners noted in historical analysis of Indian equity market cycles.