- A sloping trend line is called a wedge, however, both trend lines will slope instead on one of the lines being horizontal.
- When an ascending wedge occurs it indicates that there are more participants in the market selling and often indicates that any upward momentum will begin to slow.
- Breakouts that occur in wedges, always follow the opposite direction of the original move. They can be easily identified by a retracement that begins lower than the previous peak.
- It should be noted that many major market trends have ended with either an ascending or descending wedge.
The Two Types of Wedges:
- Ascending wedge
- Descending wedge