Triple top

A triple top is a bearish reversal pattern consisting of three peaks at approximately the same price level, separated by two valleys. The pattern shows that price has tested a resistance level three times and failed to break above it all three times, revealing mounting exhaustion among buyers. Each failed rally at the same level represents another failed attempt by bulls to overcome resistance. When price finally breaks decisively below both valley lows, the pattern is complete, and a sustained downtrend often follows. Triple tops are rarer and more significant than double tops because the triple failure to break resistance signals exhaustion more definitively.

How triple top forms

The pattern unfolds as price repeatedly tests the same resistance level. The first rally to the level fails; price retraces to the first valley. A second rally approaches the level; sellers repel it again. Price retraces to the second valley, which is typically at a similar or slightly higher level than the first. A third rally attempts the same level; once again, buying power is insufficient. On the third failure, exhaustion is evident—buyers have tried and failed multiple times.

The defining feature of a triple top is that each peak is at approximately the same level. This shows the resistance is real, not a random bouncing around of price. The multiple tests and failures reveal buyer fatigue.

The valleys and support

The two valleys between the peaks provide support levels. If both valleys are at approximately the same level, breaking below that level (below both valleys) is the confirming signal. If the valleys are at different levels, the pattern is less clean.

Volume behavior

Volume typically declines with each successive peak—the first peak has strong volume, the second has less, the third even less. This declining volume reveals weakening buying conviction. On the eventual breakdown below the valleys, volume should surge, confirming sellers are in control.

Measuring the reversal target

Similar to double tops, the measuring objective is valley low minus the height from the valley to the peaks. This provides a downside target estimate.

Rarity and significance

Triple tops are rarer than double tops because the third failure at the same level is less common. However, when they do occur, they are more significant—three strikes against the bulls suggests exhaustion is real.

Trading a triple top

Confirmation: Wait for price to close clearly below both valley lows on increasing volume.

Entry: Short on the breakdown, or wait for pullback confirmation.

Stop-loss: Place above the peaks.

Profit target: Use the measuring objective.

Real-world example

A stock rallies to $120, drops to $105, rallies to $119, drops to $106, rallies to $121, then closes below $105 on heavy volume. The pattern signals exhaustion, with a measuring objective around $105 - $15 = $90.

Academic perspective

Academic research on triple tops is sparse. The pattern’s rarity limits the sample size for statistical study.

See also