A Wedge is a chart pattern made up of two connected lines joining a series of peaks and troughs.
Falling wedges may signify interruptions of upward price rallies. Rising wedges could signify interruptions of a falling price trend. Technical Analysts in stock trading, options trading, and futures trading see a breakout of this wedge pattern as either bullish (on a breakout above the upper line of a falling wedge) or bearish (on a breakout below the lower line of a rising wedge).
Below is an example of a Falling Wedge (bullish) on the 9 month chart of BAC:
Related terms: Ascending Triangle, Descending Triangle, Symmetrical Triangle, Rounding Top