wedge and technical analysis

[Guest phil]

whats it called when the wedge looks like it's ascending, but the top is horizontal? is it bearish or bullish? Like this?

[Caseynotes]

Hi phill, if the top line is horizontal and the bottom line is ascending then it is an ascending triangle and repeated attacks on the horizontal resistance level will reduce the number of sellers at that level to breaking point, so the theory goes. It doesn't always work out that way and that is not a particularly good example as it's too drawn out which suggests the sellers are strong while the buyers are struggling to lift price back up each time. 

For triangles; https://www.babypips.com/learn/forex/triangles

For wedges; https://www.babypips.com/learn/forex/wedges 

[Mercury]

Also a good rule of thumb is that for a Triangle to be valid it should be broken no later than 2/3 of the way along the length, otherwise it becomes an unreliable set up.  The longer term the chart the more reliable the Triangle (i.e. Daily chart is much stronger than 1 hour chart, true of most technical analysis actually).

[Guest PandaFace]

Interesting. I thought higher highs meant it was going to try and breakout to the upside? But Casey it sounds like your saying this is a bearish signal? 

[Caseynotes]

Correct, repeated attacks on the horizontal level will usually over-run all the orders waiting there but I don't see this as a triangle, the structure is poor and the attacks on the horizontal are weak and beaten down with strength. There is probably a stronger case for drawing another horizontal at the grey line on the 3 equal lows.