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The triple bottom pattern is a reversal pattern following a downtrend made up of three similar lows and should mark significant turning points for the market during the periods of upswings. In contrast to the triple top pattern, the triple bottom pattern usually spans many months and confirmation of the pattern usually results from a break above resistance.
Another signal of confirmation can also be found with the overall level of volume. Volume, generally, declines as the pattern is forming and an increase in volume during the subsequent rise in price after the third low greatly supports the bullishness of the triple bottom pattern.
The highest point of the formation is, usually, seen by technicians as the key resistance level and once this level is broken and subsequent sell-offs trying to break through this once-resistance point (now posing as a support) fails, the demand has overwhelmed the supply and the triple bottom pattern is confirmed.
The above example shows the price in a down-trend to point A. It then traded in a range for about four months, failing to break support at points B and C. With demand overwhelming supply, the price slowly increased to the previous intermittent high and resistance of the triple bottom pattern (top line on chart) and then broke through the resistance level. Thus, the triple bottom pattern was confirmed. Subsequent retracements to the new support level (former resistance level) failed to reverse the direction of the bullish pattern, further reinforcing the forming of the triple bottom pattern.
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