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Technical analysis II

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16. Wedge formations

If you draw trend lines along both the bottom and top of a share price chart, you will sometimes get a trend channel and you'll sometimes get a wedge shape similar to the one below.

A rising wedge



Notice that wedge formations take place over a period of 3-4 weeks. This is because they occur as reversals of intermediate and minor trends. They will not be seen, except in unusual circumstances, as reversals to a major market trend.

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