As a reversal signal, it is formed at a bottom of a downtrend, indicating that an uptrend would come next.
As a continuation signal, it is formed during an uptrend, implying that the upward price action would resume. Unlike the , the is a chart pattern.
In this example, the may be predicted as a reversal signal after breaking . After a downtrend, the price made lower highs and lower lows.
Notice how the falling connecting the highs is steeper than the connecting the lows.