Rounding bottom
bullish · reversal pattern · also: saucer
A rounding bottom (or saucer) is a long-duration bullish reversal pattern showing a slow, smooth U-shaped transition from downtrend to uptrend. It typically takes weeks or months to form and is more reliable than V-bottoms.
Formation rules
- Long-duration U-shaped price action
- Volume traces a similar U: declines on the way down, rises on the way up
- Confirmation: close above prior consolidation high
How to trade it
Accumulate during the right-half of the bowl on rising volume. Stop below the bowl's low. Measured target = bowl's depth projected from the breakout. Rounding bottoms are favoured by long-term investors over swing traders due to the long formation time.
Common pitfalls
- Pattern can morph into a sideways base or a deeper decline
- Premature entry on the left side of the bowl is unreliable
Statistical context
Bulkowski: rounding bottoms have one of the highest reliability scores among bullish reversals, partly because the long formation filters out noise.
Related patterns
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