Rounding Bottom Pattern
Original schematic showing the guide's principal visual relationships.
Falling slope → flat base → rising slope, often accompanied by a gradual volume recovery.
Pattern anatomy
A gradual shift from declining to rising prices as selling pressure fades and accumulation develops.
Falling slope → flat base → rising slope, often accompanied by a gradual volume recovery.
How it works
Identify the prior trend first, mark repeated swing highs and lows, then draw only the support, resistance, or neckline justified by those pivots. A pattern remains provisional until price closes beyond its confirmation boundary; visual resemblance alone is not enough.
How to read it
The right side should show improving highs and lows rather than a single spike. A break above the left-side resistance strengthens confirmation.
Practical example
A prolonged decline loses slope, stabilizes, and turns into progressively higher lows and highs. Improving volume on the right side and a close above the left-side resistance help distinguish durable accumulation from a short-lived event rebound.
Confirmation checklist
Look for an established prior trend, a completed boundary break, and preferably expanding volume or momentum confirmation. A reversal pattern formed without a trend to reverse is weaker evidence.
Limitations and false signals
The long formation period makes the endpoint hard to identify, and event-driven rebounds can resemble a base without durable accumulation.
Limitations and false signals
Frequently asked questions
What does this pattern or indicator describe?
A gradual shift from declining to rising prices as selling pressure fades and accumulation develops.
How should the signal be confirmed?
The right side should show improving highs and lows rather than a single spike. A break above the left-side resistance strengthens confirmation. Look for an established prior trend, a completed boundary break, and preferably expanding volume or momentum confirmation. A reversal pattern formed without a trend to reverse is weaker evidence.
What can cause a false signal?
The long formation period makes the endpoint hard to identify, and event-driven rebounds can resemble a base without durable accumulation.