Buyers take advantage of price consolidation to create new buying chances, defeat the bears, and drive prices higher. The falling wedge pattern denotes the end of the period of correction or consolidation.
It suggests that the current trend will either continue or reverse. The pattern is considered a continuation pattern during an uptrend and a reversal pattern during a downtrend.Ī descending wedge formation, which is bullish in technical analysis, indicates that the downward trend is losing momentum. The factor that distinguishes the bullish continuation from the bullish reversal pattern is the direction of the trend when the falling wedge emerges. Different market conditions exist in both cases, and these must be taken into account. There is significant confusion in identifying the descending wedge pattern because it isseen as both a bullish continuation and a bullish reversal pattern. A falling wedge pattern is regarded as a bullish chart formation, it can also signify continuation or reversal patterns depending on where it appears in the trend.
The falling wedge pattern is a continuation pattern that forms when the price oscillates between two trendlines sloping downward and converging.
