Rounding Top

Rounding Top is a bearish four-line pattern of the Line-break chart.

Name ‘Rounding’ is given because pattern structure looks like the traditional rounding formation which has witnessed breakout.  It suggests more ‘price’ is spent before the bearish breakout.

A bearish line is followed by a pullback or correction of two bullish line before resumption of the downtrend. Fourth bearish line reverses the trend by going below the low of the previous three lines.

This pattern is developed by Definedge and explained in detail with data testing in the book on the Line Break Charts by Prashant Shah available for free on Shelf.

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This pattern can be plotted on the chart by adding it from the Add study menu in TradePoint & Patterns in RZone. The pattern is also available in the System Builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.