Wedge

Posted in Finance, Accounting and Economics Terms, Total Reads: 295
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Definition: Wedge

In technical analysis, a security worth pattern wherever trend lines drawn on top of associated below a worth chart converge into an arrow form. Wedge formed patterns square measure thought by technical analysts to be helpful in analyzing a brief to intermediate term reversal of what the analyst feels to be the main worth trend.


Explanation

Once the value breaks out of the wedge, it's expected to come to the key trend. Technical analysts see a 'breakout' of this wedge pattern as either optimistic (on a flight on top of the higher line) or pessimistic (on a flight below the lower line). A triangle inform upwards (rising wedge) is employed in analyzing an upward value trend inside an overall downward value trend.


Tier wedge is taken into account a amount of consolidation, which is able to not reverse this major trend. Finally a wedge inform downwardly (falling wedge) is employed to investigate a downward value trend inside an overall upward value movement.

 

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