The ROUNDED TOP can tell you that there is trouble ahead for the stock. It is characterized by a gradual deceleration of price appreciation followed by a gradual acceleration in price downward -- demonstrating to the observer that money is moving out of the issue.

In the example above the formation is not perfectly symmetrical because of the 1987 Crash and the sucker rally in 1991, but you can see that money was abandoning this issue long before 1992 when the public finally realized that IBM was in deep trouble.

The ROUNDED TOP warns the observer that distribution is taking place and provides ample opportunity to exit before horizontal support or a rising trend line are violated. Of course it is always possible that the formation can turn into a consolidation pattern from which price breaks out and moves higher, but money is far better off in an issue that has just broken out of a long base, where price appreciation is expected to be greater and come sooner.