Education & Information
Buy Signals
Bullish Catapult
A bullish catapult formation occurs when a double top follows a triple top. This provides confirmation that the triple top is a successful one. The column of Os following the triple top needs to hold above the previous column of Os. In other words, there cannot be a sell signal between the triple top and the double top. The significance of this is the higher column of Os indicates weakening supply. The following double top indicates demand is strengthening further. A conservative investor may want to wait for a catapult pattern prior to making a purchase rather than buying after the triple top. You may buy at a little higher price than if you bought immediately after a triple top; however the catapult indicates the trend following the triple top is proceeding as expected. Another strategy that can be used is to buy ½ of the position on the triple top, then purchase the other ½ on the catapult.