Rounding Bottom
A gradual, curved transition from decline to advance over an extended period, with no sharp low.
How it is identified
Test: successive lows form a shallow concave curve over many periods, with volume typically contracting into the base and expanding on the advance
Unit
qualitative
In depth
Also called a saucer, this formation takes months or longer, which is both its distinguishing feature and the reason it is hard to trade — the shape only becomes apparent well after the low. The lack of a sharp low means there is no obvious stop level, so risk must be defined by a percentage or a volatility measure rather than by structure. It is most often cited for large-cap stocks recovering from a prolonged decline, where the turn is genuinely gradual. The entry describes a shape observed after the fact and asserts nothing about the future.
Worked example
A stock declines from ₹560 to ₹400 over eight months, drifts between ₹395 and ₹420 for five months, then rises to ₹470 over four months. The base is only identifiable as a base once the advance is well underway.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Rounding Bottom” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.