If the price makes multiple swings to new highs, the price waves become smaller, resulting in a rising wedge. In essence, the price action is uptrending, but contracting price action indicates that the upward momentum is slowing.

The share basket for Cyber Security, which is also available on our platform, shows an ascending wedge. While the price action within the wedge is rising, the price waves are becoming smaller.

When a rising wedge appears in an uptrend, it indicates slowing momentum and may predict a price drop in the future. When the price fell below the rising wedge, there was a drop. In this case, however, the drop was brief before another rally occurred.

When a rising wedge appears in an overall downtrend, it indicates that the price is rising (causing a pullback against the downtrend) and that these price movements are losing momentum. This suggests that if the price breaks below the wedge pattern, it may continue to fall lower.