What Is a Triple Bottom?
Three lows at similar support with rallies between form a hardened floor. Resistance across rally peaks is neckline. Each test that holds removes more supply. Triple bottoms often take longer than double bottoms—institutions accumulate patiently. Break above neckline projects rally equal to pattern depth. Pattern quality rises when each low holds on similar or declining volume and breakout volume surges. Common at sector rotation lows and after extended bear markets.
Third low shakeout slightly below prior lows that quickly recovers can be bullish spring—context matters.
How Do You Validate the Pattern?
Three clear lows in support zone—not three ticks in one session on daily chart unless intraday trading. Neckline identifiable across two or three middle peaks. Prior downtrend or correction provides context. Lows roughly equal—deep third low may be stop hunt then recovery. Volume dry on later lows preferred. Ascending neckline from improving middle peaks is bullish. Avoid forcing triple bottom on every range in bear market without breakout proof.
Weekly triple bottoms carry multi-month implications; align hold period with timeframe.
What Confirms the Neckline Breakout?
Close above neckline on strong volume—ideally highest volume of pattern. Hold on retest. Third low hold without break is anticipatory signal only—confirmation still requires neckline break. RSI trending up through pattern helps. Gap breakout needs hold above neckline on pullback. Multiple prior failed breaks at neckline make successful break more significant when volume finally confirms.
Breakout coinciding with positive sector or index trend reduces isolated failure risk.
Where Do Stops and Targets Go?
Stop below third low or below support zone including shakeout buffer. Target adds neckline-to-low depth to breakout. Partial at measured move; trail below rising averages. Retest entry at neckline improves risk-reward. Size from stop width—long bases in volatile names need smaller positions. Overhead resistance from old downtrend may cap first leg—plan partials.
Document whether third low was exact hold or spring—springs can offer tighter stops with same target math.
What Causes Triple Bottoms to Fail?
Support gives way on fourth test or breakdown before third completes. Low-volume breakout reverses. Bear market macro overwhelms stock-specific base. Confusion with descending triangle—lower highs into flat support is bearish, not triple bottom. Close back below neckline after breakout—exit. Endless tests without break become dead money—time stop valid. News gap down through support invalidates structure.
Failed triple bottom sometimes accelerates down—support that held three times becomes vacuum when it finally fails.