Business, Legal & Accounting Glossary
A triple top is a price pattern used by technical analysts when attempting to anticipate the end of a long uptrend — it is a reversal pattern. Three peaks at nearly the same price level identify a triple top. When the price falls below the triple top pattern’s lowest low, the triple top pattern is complete. In general, trading volume diminishes during the formation of the triple top. Some experts suggest volume should be lower with each peak, then increase as the price declines after the third peak. When a stock, index, or commodity forms a triple top, traders believe it signals the exhaustion of buying interest and may open a short position after the price breaks below support (i.e. the lowest low). A triple top is similar to a head and shoulders pattern, except that all peaks are nearly equal rather than the middle peak being higher. Upon completion, both the triple top and the head and shoulders pattern indicate the end of an uptrend and the start of a downtrend.
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This glossary post was last updated: 5th February, 2020