A worked example that explains the rule, not a stock price. The circle marks the first close beyond the level. The blue line is the target. The orange line is the invalidation. Prices are in the right-hand column, and sessions sit under the volume bar.Hollow green candles closed above their open, and filled red candles closed below it.
Numbers in the example chart
From the same calculation that draws the shape and writes the "Measuring the target" section below.
Trigger level
$118 · at the close of session 37
Target
135$
Invalidation
102$
Chart span
60 sessions
What it is
A steady decline with lower highs turns up with no real base, so price draws the letter V.
There is no building period and no second low to test. The seller disappears suddenly and the buyer pays as fast as price fell, which is why it is hard to spot before it completes. The signal comes late by nature. It also appears inverted at tops: an accelerating rise with higher lows turns down with no second peak.
The declineConsecutive lower highs, and every bounce gets sold. Nothing hints at a reversal.
The lowOne to three sessions on high volume, then the trend flips without pausing.
The risePrice quickly recovers half the decline, and the lower highs are crossed one after another.
ConfirmationA close above the last lower high. Before that, the move is a bounce inside a decline that may still end at a lower low.
Recognition rules
At least three lower highs in the decline that leads into the low.
The low itself lasts no more than three sessions. A longer base makes it a different pattern.
The rise retraces at least half of the decline, in no more time than the decline took.
Volume peaks near the low and stays high through the first rise.
The rise crosses the lower highs one after another without returning to the low area.
Confirmation is a close above the last lower high in the decline.
Measuring the target
The completion reference is where the decline began. It measures how far the move has run. It is not a promise. In the example, price closes above the last lower high near $118, the decline began at $135, and the pattern fails on a close below the low at $102.
Where it fools you
Buying during the decline because you think it is a sharp low is a bet on a pattern that has not formed. The signal is a close above the last lower high, not the low itself.
With no base, there is no nearby level to protect the position. Invalidation sits at the low itself, far from the signal point.
A distant invalidation level means more risk per share. Size the position on the distance to the low, not the distance to the target.
A sharp low followed by a second, higher low is not this pattern. It is the start of a double bottom, and the read moves to that pattern.
Open the daily timeframe for any symbol and draw the pattern yourself. Your drawing is saved per symbol in your browser, and the terminal does not name or detect the pattern.
━ LevelLast lower high
⇕ MeasureTarget equals pattern height
We do not detect chart patterns with a numeric rule: telling them apart takes judgment on the chart. Candlestick patterns with a numeric rule are detected daily by the candlestick pattern scanner.
Mirror image: inverted V-shaped sharp reversal
The same pattern turned upside down, with the same rules in the opposite direction: what was a top becomes a bottom, and the trigger, target and invalidation all flip direction.
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