Falling wedge one of the most popular reversal patterns. A reversal pattern is a chart pattern which is used to show a reversal of stock or any asset. However, falling wedge is a reversal pattern. Therefore, falling wedge can be categorized as continuation or reversal pattern which depends on the prevailing trend factor.
Wedge pattern always acts like triangle patterns as they manifest themselves in form of converging trend lines and that also narrows price ranges inspire wedge patterns are called to have a quite noticeable upward or downward tilt. However, it should be noted that a falling wedge pattern can be found in both downtrends and uptrends. This thing may sometimes signify either a continuation or a reversal. If a falling wedge takes place on an uptrend the then the falling wedge will act in a same way to a bull pennant to form part of a continuation pattern.
The breakout expectations of a falling wedge can be determined through giving attention to the continuation of the falling wedge. Moreover, the widest portion of the wedge can be calculated and then added to the breakout level to measure the upward movement of the asset. However , if the falling wedge take places within a reversal pattern, then the largest portion of the wedge must be added to the breakout level for the determination of the upside move which follows then.
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