Education & Information
Sell Signals
Triple Bottom Pattern
The triple bottom is a stronger pattern than the double bottom in that it takes a little longer to develop meaning that there is a balance in the supply and demand relationship prior to the pattern being broken. When balancing patterns are broken, often times the stock will make a strong move in the direction of the breakout. In the case of triple bottoms, the strong move will be down. In the example above, it shows that the columns of Os stop at $33 indicating that demand is strong there as the stock turns up from that level two times. The columns of Xs stop climbing at $37 for the first column and $36 for the second. This means that supply is strong at that level resisting the shares. The balance pattern exists in the first four columns between $33 and the $36 - $37 range. The third time supply brings the stock down to $33 the demand is not present to push the stock up. When you are able to put an O in the $32 box during the third column of Os the triple bottom is broken. The conclusion is that supply is taking over control and the balance is broken. A new trend is beginning. When a stock breaks a triple bottom, the probabilities are high that it will continue to decline. All the buyers at $33 have bought and removing that demand from the equation is like taking the floor out from beneath the stock’s price.