📉 Rounding Top Pattern – Long-Term Bearish Reversal

The Rounding Top, also known as a Saucer Top, is a long-term bearish reversal pattern. It shows a gradual transition from an uptrend to a downtrend and indicates distribution by sellers.

📘 What Is the Rounding Top Pattern?

The Rounding Top is a smooth, inverted U-shaped formation that occurs after a prolonged uptrend. It reflects a period where buyers gradually lose control and sellers slowly dominate, leading to a bearish breakdown.

• Appears after a long-term uptrend.
• Shape resembles an inverted "U" or saucer.
• Volume usually declines during the rise phase and increases on the breakdown.
• Breakdown below support confirms the start of a new downtrend.
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💡 Market Psychology

- Advance Phase: Buyers dominate initially but gradually lose momentum. - Top Formation: Price stabilizes and selling gradually increases. - Breakdown Phase: Strong selling pressure pushes the price below support, confirming a bearish reversal.

✅ Pro Tip: Watch for increased volume on the breakdown to confirm the start of a new downtrend.

⚙️ How to Trade Rounding Top

1. Identify a prolonged uptrend followed by an inverted U-shaped formation.
2. Wait for the price to break below the support formed at the bottom of the rounding top.
3. Enter a sell (short) position after breakdown confirmation.
4. Place a stop-loss above the highest point of the rounding top.
5. Set a target using the height of the pattern projected downward.
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🏁 Conclusion

The Rounding Top pattern is a reliable long-term bearish reversal indicator. Recognizing it early and confirming with volume can help traders and investors identify the start of a new downtrend.

“When the Rounding Top forms — distribution completes, and the bears take control gradually.”