Technical Analysis

Rounded tops and bottoms


You guessed it, rounded tops and bottoms are similar to head & shoulders and triple tops and bottoms. When each patterns forms, it suggests that the stock market will move in the opposite direction.


Rounded tops and bottoms are arguably the easiest to identify as you simply need to look for a smooth, semi-circular shape. There is no set timeframe for how long a rounded top or bottom takes to form.


As much as rounded tops/bottoms, triple tops/bottoms, and head & shoulders are used to make money, they are also used as signals to stop losses. When they form, a trader may close their position.


Much like the other technical indicators discussed, rounded tops and rounded bottoms are typically used by short-term investors. However, long term investors may use them to identify an entry point. 

Test your knowledge...

1. How much can you expect to earn from a cash investment?

Copyright © 2021 Methodology

That's wrong - try again!