Falling Wedge
A formation in which both boundaries slope downward but converge, with the upper boundary falling more steeply than the lower.
How it is identified
Test: lower highs and lower lows, with the line through the highs falling faster than the line through the lows
Unit
qualitative
In depth
The mirror of the rising wedge: price continues to fall while the rate of decline slows, which is the observable content of the shape. It is distinguished from a descending channel only by the convergence of the boundaries, a judgement that depends on which swing points are selected, so two analysts can reasonably disagree. The narrowing range does give a well-defined and progressively tighter stop level, which is the pattern's practical merit. No directional claim is made here.
Worked example
Highs of ₹534, ₹512 and ₹498 fall ₹36 while lows of ₹480, ₹470 and ₹466 fall ₹14. The range compresses from ₹54 to ₹32 even as price makes new lows.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Falling Wedge” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.