TRIPLE TOP PATTERN

How the triple top forms ?

✍The triple top is a type of price pattern used in technical analysis to predict the reversal in the uptrend movement of an stock price. 

✍Consisting of three tops, a triple top signals that the stock/index may no longer be bullish, and that downtrend prices may be take place.

✍Triple tops may occur on every time frames, but the formation in uptrend is considered as triple top.

Working of triple top ?

✍The triple top pattern occurs when the price of an stock/index creates three peaks at nearly the equal price resistance. The falls between the peaks are the swing lows. 

✍After the third peak, if the stock falls below the support line, the pattern is confirmed and traders wait for a further move to the sell side.

✍The three consecutive tops forms the triple top may look similar to the head and shoulder pattern. However in ths case the tops formation is nearly equal to same level. 

How to trade the triple top pattern?

✍The trading of triple tops are more or less same like a head and shoulder pattern after breakdown of support line.

✍The trade has to be take on the sell side of price and the stop loss has to be taken at the high point of top.

✍The target is to put at the same height of pattern below the support line.

KEY POINTS

• A triple top is formed by three peaks moving into the same range, with bounces in between.
• A triple top is confirmation, indicating a further price drop, once the price moves below pattern support line.
• A trader can cover bullish position or enters short sell when the triple top confirms.
• If trading the triple top, a stop loss can be placed above tops.
• The expected sell target for the pattern is the height of the pattern subtracted from the breakdown point.

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