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Wedges are similar to triangles in that
these patterns are formed between converging support and resistance
lines. However, where the support and resistance lines in a triangle
have one positive and one negative slope, the support and resistance
lines of a wedge would both have either a positive or negative slope.
Wedges with positive slopes are called Rising Wedges and ones with
negative slopes are Falling Wedges.
The
resistance of a falling wedge is the key level for entry triggers.
A breakout triggers the
longs (reversal entry) while a continued push lower through the
support of the bottom downtrend line is confirmation of a push lower.
This pattern is also perfect for corrective entries in a confirmed
uptrend. |
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