What Is a Rising and a Falling Wedge

Two wedges

A wedge is a stretch where the line over the highs and the line under the lows lean the same way and close on each other. The Dow — the index of thirty large American companies, quoted in points — made a rising one from 21 October to 4 December 2024: the highs rose from 43,346 to 45,105 and the lows rose faster, from 41,651 to 42,892. The euro against the dollar made a falling one from 23 October to 22 November: the highs fell from 1.09368 to 1.06093 and the lows fell more slowly, from 1.07608 to 1.0332. Both lean; both narrow.

A doorstop

The picture is a doorstop: thick at one end, thin at the other, and leaning. A rising wedge leans up, its two lines both rising with the lower one faster, so the price is squeezed toward a thin end at the top right. A falling wedge leans down, both lines falling with the upper one faster, and the thin end is at the bottom right. The shape says the swings are shrinking. It does not say which way the price comes out.

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