SEQUENT SCIENCTIFIC LTD (MASSIVE VOLUME )
Characteristics of a Rounding Bottom:
Shape: The pattern looks like a “U” or a bowl, indicating a slow and steady shift from a downtrend to an uptrend.
Volume: Volume typically decreases as the price declines and forms the bottom, then increases as the price starts to rise.
Duration: This pattern can take several weeks to several months to form, making it more common in longer time frames.
How to Trade a Rounding Bottom:
Entry Point: Consider entering a long position when the price breaks above the resistance level formed at the top of the pattern.
Stop Loss: Place a stop loss below the lowest point of the rounding bottom to manage risk.
Target Price: The target price can be estimated by measuring the depth of the pattern and projecting it upwards from the breakout point.
Example:
Imagine a stock that has been in a downtrend, but over several months, it starts to form a rounding bottom. As the price begins to rise and breaks above the resistance level, it signals a potential uptrend, providing a buying opportunity.
Shape: The pattern looks like a “U” or a bowl, indicating a slow and steady shift from a downtrend to an uptrend.
Volume: Volume typically decreases as the price declines and forms the bottom, then increases as the price starts to rise.
Duration: This pattern can take several weeks to several months to form, making it more common in longer time frames.
How to Trade a Rounding Bottom:
Entry Point: Consider entering a long position when the price breaks above the resistance level formed at the top of the pattern.
Stop Loss: Place a stop loss below the lowest point of the rounding bottom to manage risk.
Target Price: The target price can be estimated by measuring the depth of the pattern and projecting it upwards from the breakout point.
Example:
Imagine a stock that has been in a downtrend, but over several months, it starts to form a rounding bottom. As the price begins to rise and breaks above the resistance level, it signals a potential uptrend, providing a buying opportunity.
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