Reversal Chart Pattern: Triple Bottoms
The triple bottoms pattern is the opposite of the triple top pattern. The triple tops (three valleys) pattern is a short-term bullish trend reversal pattern that often indicates the end of a downtrend and the beginning of an ascending trend. This triple tops pattern consists of three distinct decreases (valley formation) forming a support level with the same or more equal level and the peak formed as a clear separator between three decreases (valleys). The high level achievable by the peak is important for price projection purposes. Just as volume is important. Instead, the volume should increase along with the formation of a decrease (valley) in a row.
Like the triple tops pattern, the triple bottoms patterns pattern only has an entry signal to buy (buy). This signal is triggered when the price breaks the support level which is at the lowest level of the valley between two peaks and closed above it. This breakout should be accompanied by an increase in volume as a decreasing volume may indicate a false breakout.
The price projection for the triple bottoms pattern is the same as double bottoms. This is calculated by taking a distance from the resistance level formed at the highest peak level between the peak to the bottom of the valley (decrease) and adding it to the point where the resistance level is then able to be broken by the price.
However, the price will usually try to retest the previous resistance level, which will now be the support level (after penetration) and may even break this level again before the uptrend is in effect.
If the support level is able to be broken by a strong price movement, you should be cautious and may be an indication of the exit level of the trading, wanting to re-entry as the price breaks back above the support level.
The level of triple bottoms can be more reliable than double bottoms because the support level in the valley has been through three tests and is able to survive.