List of Financial Market Terms

A triple bottom is a pattern used to predict the reversal of a prolonged downtrend. It's identified when the price of a stock creates three troughs at close to the same price level. The third bounce off of support is an indication that buying interest (demand) is outweighing selling interest (supply) and that the trend could be reversing.

The triple bottom is an important way to predict reversal patterns.  The difference between the three troughs (A) and the peaks (B) can generally be expected to be the amount the stock will rise from the B.

triple bottom pattern in stocks

In this example, the troughs (triple bottom support) are near 80 while the peaks (triple bottom resistance) are near 104. This translates to a height of 24, represented by the large yellow oval. 

Take the 24 height and add it to triple bottom resistance of 104 to get the measured move (target) of 128. A small yellow oval was used as a visual cue for the target.

The stock continued to rise after reaching the measured move, but not before a quick sell off took place likely as a result of technical Traders taking profits and moving on to the next trade.

Triple Bottoms are bullish patterns used by Traders in day trading systems, options trading systems, futures trading systems, and other trading systems to predict the reversal of the downtrend.

Related terms: double top pattern, double bottom pattern, and triple top pattern.

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