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What is a P&F triple bottom?

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A Point & Figure triple bottom is just what it sounds like: three lows that form a triple bottom. Advances on P&F charts are marked with columns of X’s and declines are marked with columns of O’s. A triple bottom starts with two reaction lows that mark support. A reaction low forms with a column of O’s followed by a column of X’s. In the Mohawk chart below, the red arrows mark an evolving triple bottom with two reaction lows. These lows mark an important support level. A break below these two lows would forge a triple bottom breakdown, which is a bearish P&F signal.

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In addition to an evolving triple bottom, Mohawk has a confirmed triple bottom breakdown already in play. The blue arrow shows Mohawk breaking below the prior two reaction lows. This break triggered a triple bottom breakdown alert on August 12th, which can be seen at the top of the chart (blue box). P&F signals come with price objectives based on traditional P&F analysis. The downside projection for Mohawk is 36, which can also be seen on the price scale (blue oval). Stockcharts.com provides P&F alerts everyday on the predefined scans page ( click here). There is also a detailed article on P&F charting techniques in our ChartSchool ( click here).

Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
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