In technical analysis, a rounding bottom in a stock’s price pattern is nicknamed a Jennifer Lopez of J.Lo.
A J.Lo in a stock’s price pattern can be an indication of a positive market reversal, where expectations are gradually going from bearish to bullish.
- The price of a share reaches the bottom and gradually starts to increase, hence, the name rounding bottom.
- This means that the price of the security is moving from low to high and the increase is likely to be sustained.
- It is believed that this is a positive sign. If one creates a chart of the pricing of rounding bottom security then it would be U shaped.
- The prices tend to go upwards when the buyers enter the trade in the market at a low price which increases the demand of the share.
- Once the rounding bottom is complete, the share is likely to sustain its upwards trend.
- The market is such a condition that changes from bearish to bullish.