Technical Analysis

Rounded tops and bottoms

1

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.

2

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.

3

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.

4

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. 

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