V.15:5 (235-242): On Rising Wedges by Thomas Bulkowski

On Rising Wedges by Thomas Bulkowski

As your stock rises and sector rotation becomes more pronounced, it's wise to be alert to a chart formation called a rising wedge. Rising wedges can get you out at the top before your stock tumbles. Here's a refresher on this intriguing formation.

Rising and falling wedges share common traits with the triangle family. In previous articles, I discussed three forms of triangles — symmetrical, ascending and descending triangles. Recall that symmetrical triangles have bounding lines — one slopes upward, while the other slopes downward. In ascending triangles, the top boundary region is described by a flat line, while the other boundary region slopes up to meet it. Descending triangles have a flat region as their base while the top slopes downward. Lines connecting the boundary regions intersect at the triangle apex and have generally diminishing volume over time.