Chart patterns (Part - 2) - Triple top and Bottom Pattern Double Top and Bottom pattern
Technical analysis

Chart patterns (Part 2) – Triple top and Bottom Pattern & Double Top and Bottom pattern

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Triple Top and Bottom Patterns 

These reversal patterns are very much similar to the head and shoulder pattern with few exceptions. 

1. Triple top pattern – It forms after an uptrend. It consists of three almost equal highs or peaks which makes a strong resistance for the price. The first and second peaks have their respective troughs which form a support for the price. The pattern completes when the price breaks below the support made by these two troughs with heavy volume. This confirms the breakout. 

Triple top

(Chart courtesy of StockCharts.com)

2. Triple bottom pattern – It forms after a downtrend. It consists of three almost equal lows or troughs which makes strong support for the price. The first and second troughs have their respective peaks which form a resistance for the price. The pattern completes when the price breaks above the resistance made by these two peaks with heavy volume. This confirms the breakout.

Triple bottom

(Chart courtesy of StockCharts.com)

Double Top and Bottom Patterns 

These reversal patterns are very much similar to the triple top and bottom patterns with few exceptions. 

1. Double top pattern – It forms after an uptrend. It consists of two almost equal peaks or highs which makes a strong resistance for the price. These two consecutive peaks have a moderate trough in between them which forms good support for the price. The pattern completes when price from the second peak declines and breaks the support or the middle trough with heavy volume. This confirms the breakout.  

double top

(Chart courtesy of StockCharts.com)

2. Double bottom pattern – It forms after a downtrend. It consists of two almost equal troughs or lows which makes strong support for the price. The two consecutive troughs have a moderate peak in between which forms a resistance for the price. The pattern completes when the price from the second trough rises and breaks the resistance or the middle peak with heavy volume. This confirms the breakout. 

Double bottom

(Chart courtesy of StockCharts.com)

 

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