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We will now talk about profile type B. This type of profile is characteristic

bearish trend movements and is representative of future accumulation

redistribution structures.

Individually, this type of profile signals an imbalance in favor of the

The sellers are in control and have pushed the price sharply lower until

buyers finally appear and a new rotation process is generated.

In the context of a longer -term bearish trend, they appear with a

redistributive character that are excellent areas to look for inclusion in

trend. As with the P pattern, the theoretical type B is formed by a

imbalance as the first part and a value creation as the second part.

An initial rotation followed by an imbalance to the upside would also

visually with a B -shaped profile.

But, trading may not be able to take advantage of the initial imbalance.

On the other hand, it would not have the same implications when analyzing the

health of the preceding uptrend, where we are looking for upside rejection and

value creation below.

As we have already mentioned, the problem with this type of reversal

that by the time we visualize it, it is too late to take advantage of the

uptrend. The positive point is that it activates the context in favor of this

movement and, although it is likely that a new range will develop in the short

term, we should favor the subsequent upward continuation of the price.

This is exactly what happens in this example.

We have an inverted P pattern leaving a strong upward movement.

If we were not able to take advantage of this impulse, we know that the dynamics

of the market will follow an unbalanced move with a balanced or range move.

The key to having identified the inverted profile is that it should bias

trading to the long side, putting us in a position to take advantage of the

potential subsequent move.

Finally, it is also useful to identify B -shaped profiles when they signal a

strong V -turn, leaving a trap or false breakout type of action.

This behavior indicates a major underlying weakness. It is a failed

where the price has attempted to move higher but has been rejected, so the

probability of a move in the opposite direction is relatively high.

This type of stock leaves us with a bearish directional bias.

So based on this context, we should only evaluate the possibility of looking for

potential short opportunities after identifying it.

So these are the three main representations of B -shaped profiles

be looking for.

It is useless for us to draw generalized conclusions after observing the

distribution of this type of profile without first analyzing how the profile

evolved. As we can see, in some cases, the evolution can suggest completely

different interpretations.

The conventional profile indicates weakness.

The context is bearish because the market had enough capacity to push the

down before developing a new range.

And since we should always prefer the direction of the prevailing trend, we

should focus on looking for selling opportunities in this case.

With the inverted shape profile, we have a representation whose range and trend

suggest underlying strength.

In a bullish context, the market will most likely continue to rise.

so we should focus on trying to identify potential buying opportunities.

Finally, the profile that leaves a P -shape with a refusal to trade at higher

prices is a very powerful print that suggests great weakness.

In this context, the directional bias is clearly to the downside, so we should

focus on looking for potential short trades.