Triple Bottom

The Triple Bottom is the bullish mirror of the triple top, signaling a potential end to a downtrend. It is characterized by:

• Three lows forming at roughly the same level.
• Two intervening peaks that create a neckline of resistance.
• Volume often diminishes on each trough, then expands on breakout.
• Confirmation occurs when price breaks above the neckline with volume.

Visually, it resembles the letter W with an extra dip — three troughs aligned against support, followed by breakout through resistance.

The triple bottom reflects repeated failure of sellers to break support and eventual control by buyers:

• The first trough marks heavy selling pressure. A rebound follows as bargain hunters step in.
• Sellers push down again to test support, but price holds. Confidence in the support level strengthens.
• A third attempt to break support also fails, convincing traders that the level represents strong demand.
• When price breaks above the neckline, buyers rush in, shorts cover, and momentum shifts upward.

The pattern highlights the exhaustion of bears and the slow accumulation of bullish strength.

Bulkowski’s data shows:

• Upward break frequency: ~65%.
• Failure rate: ~23% (the highest among bottoming patterns).
• Average rise after breakout: ~35%.
• Throwback frequency: ~64%.
• Target met rate: ~63%.

Like the triple top, the triple bottom has a higher failure rate, but when confirmed, it produces strong rallies.

Entry: Go long on confirmed breakout above neckline resistance with volume confirmation. Aggressive traders may buy near the third trough, but confirmation is safer.

Stop loss: Below the third trough (conservative) or below neckline retest (aggressive).

Targets: Minimum = distance from neckline to trough projected upward. Secondary = prior resistance zones or measured extensions.

Invalidation: Breakdown below the third trough cancels the bullish reversal.

• Mislabeling: Many triple bottoms are simply ranges that lack real breakout follow-through.
• Volume is key: Breakout volume expansion is crucial; without it, the pattern often fails.
• Time factor: Longer-spanning triple bottoms are stronger than compressed versions.
• Uneven lows: If the third trough is significantly deeper, it may signal continuation rather than reversal.
• False breakouts: Price can briefly clear neckline resistance then fall back, trapping longs.

• If neckline resistance is historically very strong with repeated failures.
• If the broader market remains firmly bearish.
• If troughs are uneven or not clearly distinct.
• If breakout lacks volume support.