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. Bo Derek

    A slang term used to describe a perfect stock or investment. ...
  4. Bottom

    The lowest point or price reached by a financial security, commodity, ...
  5. Series A Financing

    The first round of financing undergone for a new business venture ...
  6. Down Round

    A round of financing where investors purchase stock from a company ...
Related Articles
  1. Trading

    Explaining the Down Round

    A down round is a round of financing that occurs at a lower firm valuation than an earlier round of financing.
  2. Trading

    3 Round Number Setups at 100

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

    3 Ways To Tell If Your Stock Has Bottomed

    No one can call stock bottoms with absolute certainty, but there are some common trends that appear when stocks are about to hit bottom.
  4. Investing

    Big Lots Nets Big Gains on Q1 Earnings Beat (BIG)

    The discount retailer reported first quarter fiscal 2016 earnings results that beat Wall Street estimates on both revenue and profits.
  5. Investing

    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. Trading

    Spotting A Market Bottom

    Recognizing a market bottom can lead to huge opportunities for an investor. We go over how you can spot the bottom so that you can reap the rewards.
  7. Investing

    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.
  8. Insights

    A Breakdown on How the Stock Market Works

    Learn what it means to own stocks and shares, why shares exist, and how you buy and sell them.
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. 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 >>
  6. 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 >>
Hot Definitions
  1. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  2. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  3. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  4. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  5. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  6. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
Trading Center