The Triple Bottom is a technical analysis pattern that is used to identify a notable period of bullish sentiment during a period where the price is consistently hitting lows. This pattern is highly accurate in predicting a reversal in market direction, as well as an increase in volume. The Triple Bottom is generally expressed as three occurrences of prices hitting the same low – thus forming three roughly equal valleys – before the price breaching resistance and continuing its upwards momentum.

The Triple Bottom pattern should not be confused with any other chart patterns that might look similar. For instance, a head and shoulders pattern features a failure to breach the previous lows and usually, a notable high as well as the three significant lows. Also, the Triple Bottom should also not be confused with a simple W-pattern, which only involves two relevant lows and no high.

To understand the implications of the Triple Bottom further, it is important to consider the bullish sentiment of the market. Bulls, who favor higher prices, are the opposite of bears, who favor lower prices. The triple bottoms consists of three roughly equal lows which suggest that, although sellers had accumulated a significant amount of shares, buyers took control of the market and managed to push the price back up to the same level of lows, three times. This points to a large amount of buyers that is too large for the sellers to accommodate.

This is a good indication for market participants who are looking to go long, as the battle between buyers and sellers favors the former. When this occurs, it is typically followed by the price breaching the resistance – referred to as a break out –, and continuing its upwards momentum. Depending on the intensity of the bull movement, these breakouts can be quite strong, so it is often seen as a buying opportunity.

Generally, a triple bottom should be confirmed with an increase in volume, as this tends to be a reliable indication of the serious support of buyers. When traders spot the triple bottom on the chart, they should wait until there is an increase in trading volume to ensure that the price action will continue trending higher.

To summarise, the triple bottom is a technical analysis pattern that is used to predict a strong potential of the price action continuing its upwards trajectory. The triple bottom is identified by three roughly equal lows that imply a large number of buyers and is usually followed by a breach of resistance and a surge in trading volume. Depending on the intensity of the bull movement, this can present a good entry point for a bullish position.