Reversal patterns
Rounding bottom
Usually bullish
A slow, curved base where the decline flattens, turns, and gradually accelerates upward, forming a U shape.
What a rounding bottom tells you
It shows a gradual handover from sellers to buyers with no single dramatic event. Because it takes time, it tends to produce durable trends when it resolves.
Why it forms
Interest fades, price stops falling because nobody is left to sell, then accumulation slowly builds.
How traders enter it
Traders enter on the break above the rim of the base, using the depth of the base as an objective.
How it fails
The shape is easy to see after the fact and easy to imagine while it is still forming. Many apparent rounding bottoms are just ranges that later break down.
That last section is the one worth rereading. A pattern is only useful because it comes with a level that proves you wrong — without one you have a shape and a hope.
People also ask
Is a rounding bottom bullish or bearish?
A rounding bottom is usually read as bullish, but only once it confirms. Before the confirming break it is a shape, and shapes fail. Context decides more than the label does.
How do you trade a rounding bottom?
Traders enter on the break above the rim of the base, using the depth of the base as an objective.
When does a rounding bottom fail?
The shape is easy to see after the fact and easy to imagine while it is still forming. Many apparent rounding bottoms are just ranges that later break down.
Can ChartLens spot a rounding bottom for me?
Yes. Photograph or screenshot any chart and ChartLens names the pattern if it is clearly formed, with a confidence level and whether it is forming, confirmed or failed — and says nothing if it is not there.
Last updated .