📊 Structure of a Falling Wedge

• Trendlines:
  • Upper line = descending resistance (connecting lower highs).
  • Lower line = descending support (connecting lower lows).
• Shape: Wide at the top, narrowing as price declines, forming a cone.
• Volume: Often decreases during formation, showing fading selling pressure.
• Breakout: Bullish confirmation comes when price breaks above the resistance line, often followed by a retest.

🔎 Key Characteristics

• Bias: Despite the downward slope, the falling wedge is bullish.
• Context:
  • Reversal pattern when it appears after a downtrend &mdash signals trend change.
  • Continuation pattern when it appears during an uptrend &mdash signals pause before resumption.
• Psychology: Sellers push price lower, but each push weakens. Buyers gradually regain control, leading to an upside breakout.

📉 vs 📈 Comparison

⚠ ️ Trading Implications

• Entry: Traders often buy once price closes above the resistance line.
• Stop loss: Placed below the wedge lowest low.
• Profit target: Often the start of the wedge formation or measured by the widest part of the wedge projected upward.
• Risk: False breakouts can occur confirmation with volume or indicators (RSI, MACD, divergence) strengthens reliability.

JurongW      ( Date: 06-May-2026 23:03) Posted: Updated chart - If S2 fail to hold