Jennifer Lopez (J.Lo)

By
rjonesx
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What is ‘Jennifer Lopez – J.Lo’

Jennifer Lopez (J. Lo) is a slang technical analysis term referring to a rounding bottom in a stock’s price pattern. This term got its name from Jennifer Lopez’s curvy figure; she is often criticized (or praised) for her round bottom.

Explaining ‘Jennifer Lopez – J.Lo’

The rounded bottom, also known as a saucer bottom, usually means a stock price has reached its lowest point before recovering. The recovery period, much like the downturn, may take months or years to coalesce. Investors chart the time of the highest peak down to the low and calculate it takes at least that much time to recover.

Parts of a Jennifer Lopez Chart

Analysts divide a Jennifer Lopez chart into several main areas. The prior trend shows the stock’s movements before reaching its low. The prior trend is necessary for investors to try to gauge a stock’s future performance after hitting the rounded bottom. The decline is the first indication of a fall towards the rounding bottom. The decline in the chart may look jagged with several reaction highs and lows over a few months, or the stock may have decline after decline until it reaches its lowest point.

Recovery

As the stock recovers, an area in the chart, called the advance, indicates a rise in the stock price as investors begin to buy shares again. If the advance rises too sharply, the accuracy of the rounded bottom may not be valid. The rounded bottom breaks out of its low point when the stock price goes above the level of the initial decline.

Further Reading

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