Wedge pattern

On the technical analysis chart, a wedge pattern is a market trend commonly found in traded assets (stocks, bonds, futures, etc.).

It is a type of formation in which trading activities are confined within converging straight lines which form a pattern.

Falling and rising wedges are a small part of intermediate or major trend.

Once that basic or primary trend resumes itself, the wedge pattern loses its effectiveness as a technical indicator.

Volume keeps on diminishing and trading activity slows down due to narrowing prices.