Rounding Top

1. Introduction

Rounding Top is a bearish pattern, which is formed by a long-term price consolidation at the bottom resulting in an inverted bowl-like pattern. The formation of this pattern means that the long-term sideways trading is about to end, and the stock price is likely to break through downward.

2. Feature

2.1 The pattern is usually formed when the stock price has been rising for a long period of time, and the buying and selling strengths reach an equilibrium, resulting in the stock price going sideways. The sellers' power may be strengthened in the future, forming an expected downward trend;

2.2 The fluctuations at the top of the arc are mild, but the duration is long;

2.3 Once the top of the arc breaks through downward, the stock price is likely to fall substantially.