![]() ![]() When trading this pattern, it is also important to keep an eye on the volume levels. However, you will need to stay flexible until the formation fully develops. The great thing about the widening wedge pattern is that it can be both bullish and bearish, regardless of the time frame. Is Broadening Wedge Pattern Bullish or Bearish? If you are a more experienced trader, it can help you time your entry and exit points. If you are just starting out, you can use this pattern to help you identify potential reversal trading opportunities. No matter what your level of experience, the expanding wedge can be a valuable tool in your trading arsenal. If you're bearish, you can wait for a downward breakout to occur before taking your short position. If you are bullish on the security, you can go long when there's an upward breakout and the price closes above the upper trendline. However, breakouts can occur in either direction, so you need to be prepared for both scenarios. The trend is usually sideways within the expanding wedge pattern. The formation is considered complete when the price breaks outside the megaphone shape. It is created by drawing two diverging trend lines that connect a series of price peaks and troughs. © 2023 OANDA Business Information & Services Inc.The broadening wedge is a bilateral chart pattern that you can use to spot potential breakouts (if the market is trending) and short-term trend reversals. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. or any of its affiliates, subsidiaries, officers or directors. Opinions are the authors not necessarily that of OANDA Business Information & Services, Inc. It is not investment advice or a solution to buy or sell securities. ![]() However, failure to hold above US$72.20 key short-term pivotal support (also the 50-day moving average) negates the bullish tone to expose the key medium-term support at US$67.00/65.65.Ĭontent is for general information purposes only. In addition, both the daily and hourly RSI oscillators are exhibiting positive configurations and readings which indicates that medium-term and short-term upside momentum remains intact.Ī clearance above US$77.30 key intermediate resistance (the 200-day moving average & the upper boundary of the medium-term “Descending Wedge”) may see a bullish breakout towards the next resistance at US$80.20/80.70 (the upper boundary of the minor ascending channel from 28 June 2023 low & a Fibonacci extension cluster) (see 1-hour chart). Since its recent 28 June 2023 low of US$66.95, its price actions have started to evolve into a minor short-term uptrend phase and cleared above the 50-day moving average that is now turning upwards. Major downtrend phase has evolved into a potential bullish reversal “Descending Wedge”įig 1: West Texas Oil major & medium-term trends as of (Source: TradingView, click to enlarge chart) Oscillating within a short-term uptrend phase since 28 June 2023 low of US$66.95įig 2: West Texas Oil minor short-term trend as of (Source: TradingView, click to enlarge chart) Since its medium-term swing high of US$94.11 per barrel, the price actions of West Texas Oil (a proxy of WTI crude oil futures) have been oscillating within an 8-month bullish “Descending Wedge” configuration which suggests a potential major bullish reversal configuration in the process since its major downtrend phase from 7 March 2022 high of US$131.30 to low of US$63.67 that recorded a loss of -51.5%. Key short-term support rests at US$72.20, also the 50-day moving average.US$77.30 is the key intermediate resistance (200-day moving average & upper boundary of “Descending Wedge”).Major downtrend phase from the 7 March 2022 swing high has evolved into a potential bullish reversal “Descending Wedge” configuration. ![]()
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