List of Financial Market Terms

A triple top is a bearish pattern used to predict the reversal of an uptrend. It's identified when the stock price has three peaks at almost the same price level. The bounce off the resistance near the third peak is a clear indication that buying interest is becoming exhausted.

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

triple top pattern in stocks

In the example above, the peaks reside at 58 while the troughs reside at 50. This results in a height of 8 (large yellow oval), meaning the anticipated move to the downside after a triple top support break is 42 (58-50).

The small yellow oval marks the 42 target level, and as you can see the stock reached 42 rather quickly in this example. 

Another thing to note here is the fact that there was a retracement to triple top support turned resistance at 50 after the initial break.  A similar retracement was mentioned in the Double Bottom definition.

Triple Tops are used by Trader's in with a day trading system, options trading system, futures trading system, and other trading systems to predict the reversal of an uptrend.

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

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