The falling wedge has two downward-sloping trendlines, but the resistance line falls faster than the support line, creating a converging shape. Though overall declining, it typically resolves bullishly with an upward breakout.
Gradual exhaustion of selling pressure. Though the trend is down, each new low is smaller, showing diminishing bearish force. Bulls are aggressively accumulating at lows; positions are concentrating, waiting for an upward breakout.
Enter long on a high-volume upward breakout above the resistance line (win rate 69%). Stop-loss below the wedge's last low. Target = wedge height added to breakout point.
In a downtrend, usually signals a bottom reversal, but can also be a continuation pattern. An upward breakout must be confirmed with volume expansion.