Jennifer Lopez - J.Lo

DEFINITION of '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.

Traders like the rounding bottom in a stock pattern because it can be an indication of a positive market reversal, meaning expectations are gradually shifting from bearish to bullish.

BREAKING DOWN '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.

As an example, a stock may top out at $8 per share and then bottom at $6 per share 18 months later before going back up. Analysts may predict that the stock should reach $8 per share about 18 months following the lowest point on the rounded bottom, provided the stock follows that pattern. Any deviation from the upswing in the later 18 months may indicate a new pattern for the stock.

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.

The low point may take weeks to form and it looks like a pointed V shape. If a long-term decline occurs, a selling spike may create the point of the V at the stock's least expensive price. All of this occurs along the left side of the rounded bottom chart.

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.

Volume of stock trading follows the curve, but this part is not as vital as the price of the stock. Volume of stock trading usually reaches a high at the begin of the decline and when the stock reaches its previous high on the rebound. Volume reaches a low point towards the bottom of the Jennifer Lopez curve.

RELATED TERMS
  1. Rounding Bottom

    A chart pattern used in technical analysis, which is identified ...
  2. Rounding Top

    A chart pattern used in technical analysis which is identified ...
  3. Down Round

    A round of financing where investors purchase stock from a company ...
  4. Bo Derek

    A slang term used to describe a perfect stock or investment. ...
  5. "A" Round Financing

    The first major round of business financing by private equity ...
  6. Mixed Lot

    A type of order for a number of securities that is not a round ...
Related Articles
  1. Charts & Patterns

    Analyzing Chart Patterns: Round Bottoms

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com A rounding bottom, also referred to as a saucer bottom, is a long-term reversal pattern that signals a shift from a downtrend ...
  2. Investing

    The 10 Highest-paid Women in 2015

    The 10 highest paid women of 2015 earned a combined $546.1 million dollars. Here is a look at the women that made the list.
  3. Chart Advisor

    3 Round Number Setups at 100

    These three stocks should enter trend advances, higher or lower after they resolve conflicted price action at 100.
  4. Trading Strategies

    Technical Analysis: Chart Patterns

    By Cory Janssen, Chad Langager and Casey MurphyA chart pattern is a distinct formation on a stock chart that creates a trading signal, or a sign of future price movements. Chartists use these ...
  5. Entrepreneurship

    Series A, B, C Funding: What It All Means and How It Works

    Series A, B and C funding rounds have nothing to do with the alphabet, rather with the development stage of startups raising venture capital.
  6. Forex Education

    How To Interpret Technical Analysis Price Patterns: Triple Tops And Bottoms

    Triple and double tops and bottoms may be tough to spot, but once you learn them, they can be powerful patterns.
  7. Options & Futures

    Margin Trading: The Advantages

    Why use margin? It's all about leverage. Just as companies borrow money to invest in projects, investors can borrow money and leverage the cash they invest. Leverage amplifies every point ...
  8. Charts & Patterns

    Analyzing Chart Patterns: Conclusion

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com This introduction to chart patterns has provided a broad overview of chart pattern analysis and several of the largest patterns. ...
  9. Trading Strategies

    Technical Analysis: Conclusion

    By Cory Janssen, Chad Langager and Casey MurphyThis introductory section of the technical analysis tutorial has provided a broad overview of technical analysis. Here's a brief summary of what ...
  10. Charts & Patterns

    Advanced Candlestick Patterns

    Go beyond the basics! Learn to identify and trade island reversals, kicker patterns and more.
RELATED FAQS
  1. How do I implement a forex strategy when spotting a Rounding Bottom Pattern?

    Understand the key factors to implementing a profitable forex trading strategy based on recognizing the formation of a rounding ... Read Answer >>
  2. How effective is creating trade entries after spotting a Rounding Top pattern?

    Understand the characteristics of the rounding top pattern and how traders can obtain better trade entry points based on ... Read Answer >>
  3. How do I build a profitable strategy when spotting a Rounding Top pattern?

    Learn a simple stock trading strategy that is designed to profit from a bearish trend reversal following the formation of ... Read Answer >>
  4. How effective is creating trade entries after spotting a Rounding Bottom pattern?

    Understand the basics of the rounding bottom pattern, including formation and interpretation and how this pattern lends itself ... Read Answer >>
  5. How are Rounding Bottom patterns interpreted by analysts and traders?

    Understand what a rounding bottom formation is and how it is most commonly interpreted and acted upon by traders and market ... Read Answer >>
  6. What are the differences between downround and upround financing?

    Understand what down rounds and up rounds of financing mean, and learn about the typical progression of a company through ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center