The wedge chart pattern is a technical analysis tool used by traders to identify potential buying or selling opportunities. It consists of three converging trend lines, which meet at a common point, creating a wedge shape. The wedge chart pattern is used to identify when a trend is likely to continue or reverse direction.
There are two types of wedge chart patterns: ascending wedges (bullish) and descending wedges (bearish). An ascending wedge is typically seen in an uptrend and is formed when the two trend lines that form the wedge converge at the top and point downward. A descending wedge is typically seen in a downtrend and is formed when the two trend lines that form the wedge converge at the bottom and point upward.