As of 10/07/2024
Indus: 41,954 -398.51 -0.9%
Trans: 15,783 -31.37 -0.2%
Utils: 1,027 -24.05 -2.3%
Nasdaq: 17,924 -213.95 -1.2%
S&P 500: 5,696 -55.13 -1.0%
|
YTD
+11.3%
-0.7%
+16.5%
+19.4%
+19.4%
|
 43,500 or 41,600 by 10/15/202416,800 or 15,700 by 10/15/20241,125 or 1,025 by 10/15/202419,000 or 17,600 by 10/15/20245,900 or 5,600 by 10/15/2024 |
As of 10/07/2024
Indus: 41,954 -398.51 -0.9%
Trans: 15,783 -31.37 -0.2%
Utils: 1,027 -24.05 -2.3%
Nasdaq: 17,924 -213.95 -1.2%
S&P 500: 5,696 -55.13 -1.0%
|
YTD
+11.3%
-0.7%
+16.5%
+19.4%
+19.4%
| |
|
43,500 or 41,600 by 10/15/202416,800 or 15,700 by 10/15/20241,125 or 1,025 by 10/15/202419,000 or 17,600 by 10/15/20245,900 or 5,600 by 10/15/2024 | ||
Statistics updated on 8/26/2020.
For more information on this pattern, read
Encyclopedia of Chart Patterns Second Edition
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Rounding bottoms are chart patterns that are difficult to spot unless you look on the weekly scale. The break even failure rank is small and the average rise is large, so they show good performance.
Be careful midway through the turn since price sometimes shoots up only to drop back down.
 Rounding bottom chart pattern
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The above numbers are based on 990 perfect trades. See the glossary for definitions.
| Characteristic | Discussion |
Bump
|
| Weekly or daily | The pattern appears on either the daily or weekly chart. Concentrate on finding them on the weekly scale because the rounded nature is more apparent. | |
| Price trend | Price trends upward to the pattern 67% of the time (that is, 67% act as continuation patterns). | |
| Shape | Look for a rounded bowl shape, usually over many months and usually after an upward price trend. | |
| Bump | Price may shoot up midway through the turn, near the bottom, but price usually retraces most (not all) of the way back to where it started. The Bump figure to the right shows an example as does the figure at the bottom of this page. | |
| Confirmation | I use a close above the left peak because price on the right might not pause at a minor high. |
Consult the associated figure on the right.
| Trading Tactic | Explanation | 
The Measure Rule
Handle
Flat Base
|
| Measure rule | Compute the height from the left saucer lip to the lowest valley in the pattern then multiply it by the above 'percentage meeting price target.' Add the difference to the right saucer lip to get a price target. If the saucer doesn't have a right lip then use the left rim. The Measure Rule figure to the right uses the left lip (A) to the lowest valley (B) as the height. | |
| Swingers | Swing traders can sell if price bumps up midway through the rounding turn. Buy back in once price retraces back to near the price at which the bump started. Price usually re-enters the rounding turn higher than the price of the bump start. | |
| Pause | Price often pauses at the price level of the left saucer lip. | |
| Handle | If the rounded bottom forms a handle at the right saucer lip, draw a trendline from the left lip to the right and extended downward beyond the handle. Buy when price closes above the trendline. The Handle figure to the right shows this situation. The red line is the trendline connecting the left rim to the right rim and extended downward. Don't use this method the line sloped upward. | |
| Flat base | A flat base (predominantly flat over several months) leading to the rounding turn often leads to a powerful rally. The Flat Base figure to the right shows an example. | |
| Yearly middle | Patterns that breakout in the middle third of the yearly price range do best. | |
| Throwbacks | Throwbacks hurt post breakout performance. |
This is an example of a rounding turn. The bump up begins near the middle of the rounding turn and ends near the same price at which it took off.
This example shows Steelcase (SCS) on the daily scale. The chart is a bit compressed vertically, so the turn is not as rounded as it looks on my computer screen.
This chart is an excellent example of the mid-turn bump-up in price. I show that circled in green beginning from the launch price of A to B. Notice that B almost makes it back down to A before the uptrend resumes.
-- Thomas Bulkowski
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