ROUNDING BOTTOM

ROUNDING BOTTOM (saucer bottom) is a reversal pattern, a long consolidation period turning from a bearish bias to a bullish bias. 

Step 1-Prior Trend: There must be a low of a rounding bottom. 

Step 2-Decline: The decline leads to the low of the pattern. 

Step 3-Low: The low can resemble a "V" bottom, but not too sharp. 

Step 4-Advance: The advance of the lows makes the right half of the pattern, if the advance is too sharp, the validity of a rounding bottom may be in question. 

Step 5-Breakout: If the pattern breaks above the reaction high of the beginning of the decline, the bullish confirmed.