7 Ways to Tell a Stock Is Headed Down

Learn how to spot bearish chart patterns

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Triple-Top

ba2504f0 7 Ways to Tell a Stock Is Headed Down

A triple-top is considered a variation of the head-and-houlders top. Often the only thing that differentiates a triple-top from a head-and-shoulders top is the fact that the three peaks that make up the triple-top are more or less at the same level, where the head-and-shoulders top displays a higher peak — the “head” — between the two shoulders.

In a triple-top, prices rise to a resistance level, retreat, return to the resistance level again, retreat and, finally, return to that resistance level for a third time before declining. In a classic triple-top, the decline following the third peak marks the beginning of a downtrend.

While the three peaks should be sharp and distinct, the lows of the pattern can appear as rounded valleys. The pattern is complete when prices decline below the lowest low (the confirmation point) in the formation.


Article printed from InvestorPlace Media, http://investorplace.com/2012/10/7-ways-to-tell-a-stock-is-headed-down/.

©2014 InvestorPlace Media, LLC

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