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Rising Wedge Formation: Trend Reversal and Short Opportunity

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Rising Wedge Dynamics:

  • The chart shows a clear ascending channel, with the price respecting both the upper and lower trendlines over time.
  • While the trend remains bullish within the channel, the narrowing distance between the trendlines suggests a loss of momentum, a hallmark of a rising wedge.
  • This pattern is inherently bearish, as it signals that buyers are losing strength, and a breakout to the downside is likely.


Critical Buy/Sell Zone:

  • The marked buy/sell zone near the top of the wedge represents the point where the price reaches resistance and is likely to reverse.
  • This zone coincides with a key intersection of the upper trendline, the limits of the rising wedge, and potential overextension of the price.
  • The volume in this area will be a critical confirming indicator — if volume spikes while price fails to make significant upward progress, this would strengthen the bearish case.

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