Saucers – Reversal Chart Patterns

Saucers, or rounded tops and bottoms, are another form of reversal pattern that is used in long-term technical analysis. A Saucer Top is considered a bearish signal, indicating a possible reversal of the current uptrend to a new downtrend.

A Saucer Bottom is considered a bullish signal, indicating a possible reversal of the current downtrend to a new uptrend. A Saucer Bottom pattern looks like this.

Saucers – Saucer Bottom Metaphor

Saucers typically occur over a period of three weeks, but they can even be observed over several years.

Important Characteristics of a Saucer Top

1. – It represents a long consolidation period that turns from a bullish bias to a bearish bias.
2. – Volume usually follows the inverse of the price pattern. As the price begins to go up, volume tends to decrease. Once the top of the price pattern starts its downtrend turn, volume tends to increase.
3. – It is not confirmed until there is a breakout to the downside below the resistance level, which is the beginning of the upward movement at the start of the pattern.

Saucer Top Pattern Formed on NZD/USD Daily Chart – Saucers

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Important Characteristics of a Saucer Bottom

1. – It represents a long consolidation period that turns from a bearish bias to a bullish bias.
2. – Volume levels usually follow the shape of the rounding bottom: high at the beginning of the decline, low at the end of the decline and strengthening during the rise.
3. – It is not confirmed until there is a breakout to the upside above the resistance level, which is the beginning of the decline at the start of the pattern.

Rounding Bottom Pattern Formed on EUR/USD Daily Chart – Saucers