Triple Top Pattern
The Triple Top Reversal is a reversal pattern typically found on bar charts, line charts and charts. There are three equal highs followed by a break below support. As major reversal patterns, these patterns usually form over a 3 to 6 month period.
Throughout the development of the Triple Top Reversal, it can start to resemble a number of other patterns. Before the third high forms, the pattern may look like a Reversal. Three equal highs can also be found in an or . Of these patterns mentioned, only the has overtones; the others are neutral until a break occurs. In this same vein, the Triple Top Reversal should also be treated as a neutral pattern until a breakdown occurs. The inability to break above resistance is , but the bears have not won the battle until support is broken. on the last decline off resistance can sometimes yield a clue. If there is a sharp increase in and momentum, then the chances of a support break increase.
1. Prior Trend: With any reversal pattern, there should be an existing trend to reverse. In the case of the Triple Top Reversal, an uptrend should precede the formation.
2. Three Highs: All three highs should be reasonably equal, well spaced and mark clear turning points to establish resistance. The highs do not have to be exactly equal, but should be reasonably equivalent to each other.
3. Volume: As the Triple Top Reversal develops, overall levels usually decline. sometimes increases near the highs. After the third high, an expansion of on the subsequent decline and at the support break greatly reinforces the soundness of the pattern.
4. Support Break: As with many other reversal patterns, the Triple Top Reversal is not complete until a support break. The lowest point of the formation, which would be the lowest of the intermittent lows, marks this key .
5. Support Turns Resistance: Broken support becomes potential resistance, and there is sometimes a test of this newfound with a subsequent reaction rally.
6. Price Target: The distance from the support break to the highs can be measured and subtracted from the support break for a price target. The longer the pattern develops, the more significant the ultimate break. Triple Top Reversals that are 6 or more months old represent major tops and a price target is less likely to be effective.
Triple tops are chart patterns with decent performance in a bull market. The failure rate is higher than I like to see, but the average decline is reasonable. Thus, if you own a stock and the triple top confirms ( price closes below the lowest valley in the pattern), then consider selling immediately.
Winter gasoline blends are phased in as the weather gets cooler. September 15th is the date of the first increase in RVP, and in some areas the allowed RVP eventually increases to 15 psi. This has two implications for gasoline prices every fall. First, as noted, butane is a cheaper blending component than most of the other ingredients. That makes fall and winter gasoline cheaper to produce. But butane is also abundant, so that means that gasoline supplies effectively increase as the RVP requirement increases. Not only that, but this all takes place after summer driving season, when demand typically falls off. These factors normally combine each year to reduce gasoline prices in the fall (even in non-election years). The RVP is stepped back down to summer levels starting in the spring, and this usually causes prices to increase. But lest you think of buying cheap winter gasoline and storing it until spring or summer, remember that it will pressure up as the weather heats up, and the contained butane will start to vaporize out of the mix.
And that’s the true tale of why gasoline prices fall back in the fall, and spring forward in the spring.