Thursday, 26 October 2017

The Triple Bottom

After a triple bottom forms, traders tend to get ready to enter a long position once the price breaks out above the previous resistance. This pattern is a reliable indication that the downtrend has reversed.

IF the price breakout is accompanied by strong trading volumes, even better.


Volume: As the Triple Bottom Reversal develops, overall volume levels usually decline. Volume sometimes increases near the lows. After the third low, an expansion of volume on the advance and at the resistance breakout greatly reinforces the soundness of the pattern.

Resistance Break: As with many other reversal patterns, the Triple Bottom Reversal is not complete until a resistance breakout. The highest point of the formation, which would be the highest of the intermittent highs, marks resistance.

Resistance Turns Support: Broken resistance becomes potential support, and there is sometimes a test of this newfound support level with the first correction.

Further reading: Top Stock Research, Chartlink, Mudraa, Munafasutra, AmarStock, StockTwits, Nseguide

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