As of 11/20/2024   Indus: 43,408 +139.53 +0.3%     Trans: 17,002 -26.31 -0.2%     Utils: 1,055 +1.25 +0.1%     Nasdaq: 18,966 -21.33 -0.1%     S&P 500: 5,917 +0.13 +0.0%	YTD  +15.2%    +6.9%    +19.7%    +26.3%    +24.1%	Targets    Overview: 11/12/2024     46,000 or 43,000 by 12/01/2024   18,000 or 16,600 by 12/01/2024   1,075 or 1,000 by 12/01/2024   20,000 or 18,400 by 12/01/2024   6,100 or 5,800 by 12/01/2024
Chart Pattern Indicator: on 11/18/24

As of 11/20/2024   Indus: 43,408 +139.53 +0.3%     Trans: 17,002 -26.31 -0.2%     Utils: 1,055 +1.25 +0.1%     Nasdaq: 18,966 -21.33 -0.1%     S&P 500: 5,917 +0.13 +0.0%	YTD  +15.2%    +6.9%    +19.7%    +26.3%    +24.1%
Targets    Overview: 11/12/2024     46,000 or 43,000 by 12/01/2024   18,000 or 16,600 by 12/01/2024   1,075 or 1,000 by 12/01/2024   20,000 or 18,400 by 12/01/2024   6,100 or 5,800 by 12/01/2024
Chart Pattern Indicator: on 11/18/24

Bulkowski on Three Rising Valleys

Statistics updated 8/27/2020.

The three rising valleys chart pattern is one you will often see in the stock market and other markets. The reason for this begins with the rules for identification, where almost any three rising valleys qualify for a valid pattern. It is slightly more complicated than that with each succeeding valley resting above the prior one and the three valleys appearing similar. But beyond that, anything goes.

Based on test results discussed in my book, Encyclopedia of Chart Patterns (pictured on the right), the chart pattern is a very good performer in a bull market. It confirms as a valid chart pattern when price closes above the highest peak in the pattern.

Since every trend change from down to up has to post a higher low, this pattern can signal a trend change when three higher lows appear. This type of "inside information" can be invaluable to traders, but just remember that the turn upward may not last long. In a bear market, the rise is just over half what it is in a bull market. And by the time the third bottom appears and the pattern confirms, price may be a long way from the bottom.

Three Rising Valleys: Important Bull Market Results

Overall performance rank (1 is best): 6 out of 39 Break even failure rate: 10% Average rise: 48% Throwback rate: 66% Percentage meeting price target: 57% The above numbers are based on 3,061 perfect trades. See the glossary for definitions.

Three rising valleys

Three Rising Valleys: Identification Guidelines

Three Rising Valleys: Trading Tips

Trading Tactic	Explanation	Measure Rule Early Entry
Measure rule	Reference the Measure Rule figure to the right. Compute the height from the highest peak (2) to the lowest valley (1) (between the 3 valleys of the three rising valleys chart pattern) and then multiply it by the above 'percentage meeting price target.' Add the difference to the highest peak (2) in the 3rv to get a price target (3). The link to the left provides more information on the measure rule.
Early entry	Reference the lower right figure (Early Entry). If the highest peak (point A) in the three rising valley chart pattern is between the first two valleys (1 and 2), then draw a down-sloping trendline connecting the two highest peaks in the 3rv chart pattern. A close above the trendline signals a buy.
Stop	Reference the lower right figure (Early Entry). Place a stop slightly below the last minor low (point 3) in the three rising valleys chart pattern. The link to the left discusses stop placement in depth.
Yearly high	Patterns that breakout within a third of the yearly high perform best.
Continuations	Patterns that act as continuations perform better than reversals.
Breakout volume	Below average breakout volume suggests better performance for this chart pattern. For more information, click the link to the left.
Gain	The farther up the price trend the pattern appears, the smaller the potential gain. These two, Study 1 and Yearly low discuss the findings.

Three Rising Valleys: Example

The above figure shows an example of the three rising valleys chart pattern. Valleys 1, 2, and 3 mark the outline of the chart pattern. Point 4 is the confirmation price, the price at which squiggles on the chart become a three rising valleys chart pattern.

Taking the height from peak 4 (the highest high in the three rising valleys chart pattern) and valley 1 (the lowest low between the three valleys), multiplying it by the 'percentage meeting price target' from Important Bull Market Results table near the top of this page, gives a target of about 45. The stock climbed to the target a few weeks after the breakout. Shown on the log scale.

-- Thomas Bulkowski

See Also

• Trading pattern pairs: 3 rising valleys
• Three rising valleys slider quiz.
• Triple bottoms can look similar to three rising valleys. Have you misidentified it?
• You could be looking at a complex head-and-shoulders bottom.
• Three falling peaks is the compliment to three rising valleys. Find out why.
• Visit the visual chart pattern index to hunt for other chart patterns.
• The alphabetical chart pattern index covers more topics than the visual index.

Always late but worth the wait.