Trends/Reversal patterns

V bottom

A sharp fall followed by an equally sharp rise, so the low is a single narrow point.

Reversal patternsBest on 3M, 6M, 1YAlso called spike low, V-shaped recovery
V bottom diagramIllustration of the V bottom shape. It is a sketch, not real price data.Sharp low
Illustration of the V bottom shape. It is a sketch, not real price data.

What it shows

A V bottom has no pause at the low. Price drops quickly, hits a low, and rises just as quickly. The chart makes the letter V.

Our code finds it by measuring how fast price fell and rose around a swing low.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

  1. Find a swing low.
  2. Require a fall of at least 15% in the 10 bars before it.
  3. Require a rise of at least 15% in the 10 bars after it.
  4. Mark the low as the bottom of the V.

Starting values: Fall before the low 15% in 10 bars; Rise after the low 15% in 10 bars. These are proposed and will be tuned on real price data before launch.

How to read it

  • The teal dot is the lowest point.
  • Steep sides mean fast moves in each direction.
  • Both sides are of similar length and slope.

Status labels you may see

LabelWhat it means
FormedBoth sides meet the size rule.
RecoveringPrice is rising from the low.
Back above the startPrice has regained the level where the fall started.

What cancels it

A close below the low cancels the pattern.

What traders check next

  • What caused the drop and the rise.
  • Volume at the low.
  • How long price takes to regain the starting level.

Limits

  • A V looks obvious only after the fact.
  • Sharp moves can reverse again.
  • The size rule is arbitrary.

Try it in forecastviz

  • Open any ticker and choose Reversal patterns → V bottom in the left menu.
  • Switch between 3M, 6M, 1Y to see how the picture changes.
  • Compare with V top and Rounding bottom on the same chart.

Questions

Is a V bottom common?

It tends to follow sudden events such as news. We do not claim a rate.

How do I tell it from a double bottom?

A double bottom has two lows. A V has one.

Related trends

Further reading

  • Edwards and Magee, Technical Analysis of Stock Trends
  • Bulkowski, Encyclopedia of Chart Patterns
  • Murphy, Technical Analysis of the Financial Markets

Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.