When knitting stripes in the round, a jog is created at the color changes (bottom arrow). This is because knitting in the round is actually knitting in a spiral. One row is not neatly stacked on top of the other, but instead a spiraling continuation of the previous row.
To avoid the jog created by changing colors during striping:
1. Knit a row of your new color normally
2. On the next round, slip the first stitch of the round as if to purl, then continue knitting normally. This slipped stitch is elongated and pulls the entire row up higher to hide the jog created when changing colors.
The top arrow shows a stripe created using the slipped stitch method. The slipped stitch blends in with the other stitches for an almost invisible join.