Rounding bottom
Also known as: saucer bottom
A rounding bottom is a long-term chart pattern that traces out a gradual, U-shaped curve, signaling a slow shift in sentiment from a sustained to a new . Unlike sharper reversal patterns that form over days or weeks, a rounding bottom typically develops over several months as selling pressure fades gradually and buying interest slowly builds, rather than turning on a single dramatic event.
The pattern begins with a in decline, where the rate of the fall gradually slows rather than stopping abruptly, curving the into a rounded low point. From there, the begins a slow, steady climb that mirrors the shape of the decline on the way down, eventually completing the U shape as the price returns toward its earlier levels. often follows a similar curve, high near the start of the decline, thinning out near the bottom as selling pressure exhausts itself, and then gradually picking back up as the recovery gains momentum.
Because it forms so slowly, a rounding bottom is generally interpreted as evidence of a genuine, gradual change in the balance between buyers and sellers rather than a short-lived overreaction, which is part of why it is often treated as a higher-conviction reversal signal than faster patterns. Traders typically watch for the to break back above the level where the decline originally began, sometimes referred to as the neckline of the pattern, as confirmation that the longer-term trend has actually turned before treating the rounding bottom as complete.