In technical analysis, a wedge chart pattern is a formation created by the convergence of two trendlines that are either sloping upward (rising wedge) or sloping downward (falling wedge). The pattern forms when the price is oscillating between these two trendlines, forming a narrowing pattern that resembles a wedge.
A rising wedge pattern is generally seen as a bearish pattern, indicating that the price is likely to move downward once the pattern is confirmed by a break below the lower trendline. Conversely, a falling wedge pattern is generally seen as a bullish pattern, indicating that the price is likely to move upward once the pattern is confirmed by a break above the upper trendline.
Traders and analysts often use wedge chart patterns as an indication of potential price reversals or continuations, and will often use technical indicators and other analysis tools to confirm the pattern and identify potential entry and exit points.