The wedge formation is a close relative of the triangle and the pennant formations. It resembles both the shape and the development time of the triangles, but it really looks and behaves like a pennant without a pole.
The wedge is markedly sloped, and the breakout occurs in the direction opposite to its slope (see the Figure below), but similar to the direction of the original trend. The signal received from the wedge formation is the direction only. There is no reliable price objective. Depending on the trend direction, there are two types of wedges: falling shown in the Figure and rising which is the mirrow image of the falling wedge.
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