A Rounded Top is dome-shaped, and is sometimes referred to as an inverted bowl or a saucer top. The pattern is confirmed when the price breaks down below its moving average or an important support.
Robert D. Edwards and John Magee describe the rounded top as being a "gradual, progressive, and fairly symmetrical change in the trend direction, produced by a gradual shift in the balance between buying and selling". For a rounded top, the price can fluctuate or be linear. However, the overall curve should be smooth and regular, without obvious spikes.
As Martin J. Pring writes in his book, Technical Analysis Explained, "The tip-off to the bearish implication of the rounded top is the fact that volume shrinks as prices reach their highest levels and then expand as they fall."
Current Example:
ACC is showing rounding top and is one of the most bearish stocks on Indian bourses. If the stock is unable to cross Rs 850 on a sustainable basis lower targets of 8-10% is possible in this stock. CMP Rs 810
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