Reversal Patterns 5 : Triple tops and Triple bottoms

Triple top is a bearish reversal pattern formed when a share price that is trending upward tests a similar level of resistance three times without breaking through. When the stock fails to move past the resistance level three times, it is assumed that the stock price would come down. This pattern is difficult to spot in the earlier stages of formation. In the triple-top formation, each test of resistance at the upper end should be marked with declining volume at each successive peak. And again, when the price breaks below the support level, it should be accompanied by high volume.

Example of triple top pattern:

Triple bottom is a bullish reversal pattern formed when a share price that is coming down tests a similar level of support three times without breaking through. When the stock fails to move past the support level three times, it is assumed that the stock price would resume the up trend. In this pattern, volume plays a role similar to the triple top, declining at each trough as it tests the support level, which is a sign of diminishing selling pressure. Again, volume should be high on a breakout above the resistance level on the completion of the pattern.

Example of triple bottom pattern:

You may like these posts:

  1. Reversal Patterns 1 : Double tops and double bottoms
  2. Reversal Patterns 3 : The Wedges
  3. Reversal Patterns 4 : Rounding Bottom

Leave a Comment