Constructing rounded bottoms as multi-year bases

Shopping heuristics and a falling price

Everyday shopping heuristics treat a low price as a sign of damaged or leftover goods. Buying after a decline therefore feels socially wrong even when a long base is only beginning to form.

That social hesitation is part of the construction problem. The rounded or flat saucer is still being built while the price looks leftover, so the first task is to change chart scale rather than to treat the low print as a finished signal.

Forces that create the swing

Large price swings are framed as the product of three forces: rash public reaction, executive option grants after crashes, and concentrated buyers accumulating the remaining float.

Once experienced holders, hidden accumulators, and executives have distributed, prices can fall to multi-year lows, after which new low-priced option grants are arranged ahead of a later multiyear advance.

After 1930s reporting reforms, concentrated float accumulation is described as going underground. It sometimes finishes in a few days or months of heavy volume, and it is sometimes stretched across years of depressed prices.

Weekly and monthly chart scale

The rounded or flat saucer bottom is defined as a gradual sequence from decline to sideways to advance. It is specified as visible only on weekly and monthly charts.

A rounded bottom is a slow curved reversal that moves from decline through a long sideways stretch and only later turns higher. A bonanza bottom is a flat saucer variant in which the turn is so gradual that it reads as a multi-year trading range rather than a sharp V.

Chart scale is the first construction choice. Weekly and monthly bars are required to see the rounded or flat base. Shorter bars hide the construction.

Base building into a narrow range

During that base, public holders who bought years earlier keep selling while experienced buyers absorb the float. The two pressures cancel into a narrow oscillating range.

Base building is that long sideways construction, often lasting years on weekly or monthly bars. It is created while remaining share supply, the publicly available float, is transferred from late public holders to patient buyers.

Support and resistance from the range

Support and resistance are the floor and ceiling of that narrow range, including any well-defined resistance shelf that later marks where incremental buying would stop.

Editorial reading: while the decline is still turning sideways, do not add extra levels. Use only the observed edges of the oscillating range, and treat a distinct resistance shelf as the ceiling of that same construction.

One weekly construction

One weekly construction is labeled a three-year base of 180 weeks with 11 higher and 9 lower readings across 1,253 calendar days. The full rounded bottom is described as lasting eight years, and the same chart marks a distinct resistance shelf.

That example is an archive description of how a long saucer was counted on weekly bars. It is not a template that every base must match.

Late participation

Inexperienced participation is described as late: hesitation while prices are depressed, entry after widely circulated success stories, and systematic error at tops and bottoms rather than in the middle of a trend.

That late timing is why the construction has to stay on weekly or monthly scale until the selling and the absorption cancel. The testable object is the narrow range those two pressures leave behind, not a short-bar reversal.