Rounded Bottoms Chart

This formation has the same characteristics as a rounded top only this time it works in the opposite way and creates a BUY signal. Rounded bottoms are sometimes called Saucers or the Accumulation Period.

All of these patterns indicate that the downward trend is running out of steam and the market is looking to test higher ground once again.

Most experienced traders would be looking to position themselves in this accumulation period, it is called the accumulation stage as that is exactly what is happening, traders are accumulating shares.

A further extension of the rounded bottom is a formation called a Cup. It is basically a completed rounded bottom with a smaller rounded bottom formed on the right hand side thus giving the appearance of a handle for the cup.

Volume should be on the increase as the bottom starts to climb upward.
There should be even larger volumes again during the Handle stage.
























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