A rising wedge is a rebound formation that is formed in an uptrend. A rising wedge is formed with gradually decreasing volume.
The difference between peak levels and bottom levels is gradually decreasing and this results in two trend lines that gradually approach each other. Two positively sloped trend lines are drawn for a rising wedge, a resistance line along the peaks and a support line along the bottoms. The price target for a rising wedge is the bottom level in the first bottom of the formation. A sell signal is generated when the lower support line is crossed with decreasing volume.
