As of 04/02/2020
Indus: 21,413 +469.93 +2.2%
Trans: 7,446 +93.13 +1.3%
Utils: 729 +21.32 +3.0%
Nasdaq: 7,487 +126.73 +1.7%
S&P 500: 2,527 +46.40 +1.9%
|
YTD
-25.0%
-31.7%
-17.0%
-16.6%
-21.8%
|
 19,000 or 25,600 by 04/15/20206,700 or 9,000 by 04/15/2020600 or 800 by 04/15/20207,000 or 8,400 by 04/15/20202,300 or 2,900 by 04/15/2020 |
As of 04/02/2020
Indus: 21,413 +469.93 +2.2%
Trans: 7,446 +93.13 +1.3%
Utils: 729 +21.32 +3.0%
Nasdaq: 7,487 +126.73 +1.7%
S&P 500: 2,527 +46.40 +1.9%
|
YTD
-25.0%
-31.7%
-17.0%
-16.6%
-21.8%
| |
|
19,000 or 25,600 by 04/15/20206,700 or 9,000 by 04/15/2020600 or 800 by 04/15/20207,000 or 8,400 by 04/15/20202,300 or 2,900 by 04/15/2020 | ||
Statistics updated 6/25/2019.
The inverted roof chart pattern is one I discovered in early 2005. The name is based on its complement, the roof chart pattern. I found 533 inverted roofs in 377 stocks from July 1991 to April 2019.
Inverted Roof Chart Pattern
|
Important Bull Market Results for the Inverted RoofOverall rank for up/down breakouts: 17 out of 56/34 out of 53
Break even failure rate for up/down breakouts: 22%; 25%
Average rise/decline: 34%; 14%
Throwback/pullback rate: 58%; 64%
Percentage meeting price target for up/down breakouts: 67%; 57%
The above numbers are based on hundreds of perfect trades. See the glossary for definitions. |
| Characteristic | Discussion |
| Price trend | Can be any direction leading to the pattern. |
| Shape | Has a horizontal or near horizontal top with a V-shaped bottom, making the entire structure look like the bottom half of a diamond. See the above figure. |
| Uptrend | The best performing inverted roof chart patterns appear after a sharp rise like you sometimes see in diamond top chart patterns. |
| Symmetrical | The two halves of the inverted roof chart pattern should appear symmetrical. Allow variations, but most look like a V with price touching the horizontal top often. |
| Head-and-shoulders bottom | Make sure the pattern isn't a head-and-shoulders bottom or a complex head-and-shoulders bottom, but inverted roofs can be a subset of a head-and-shoulders (simple or complex variety) providing the neckline is horizontal. |
| Confirmation | The pattern confirms as valid when price closes outside the chart pattern trendline boundary. |
| Trading Tactic | Explanation | 
The Measure Rule
Price Trend
|
| Measure rule | Compute the height (the difference between the inverted roof's high, B, and the low, A) and then multiply it by the above “percentage meeting price target.” Add or subtract the result from the breakout price to get a target. The Measure Rule figure to the right shows the measure for an upward breakout. | |
| Uptrends | A strong downtrend usually follows a sharp uptrend, returning price back to (or slightly above) the launch point. The Price Trend figure to the right shows an example. | |
| Confirmation | Wait for confirmation before placing a trade because the breakout can be upward or downward. | |
| Throwbacks and Pullbacks | Throwbacks and pullbacks hurt performance. |
The above figure shows an example of an inverted roof chart pattern. Price begins the climb into the inverted roof at A and overshoots the top of the pattern (which happens about 15% of the time). The breakout from the inverted roof is downward and price returns to the launch price at B. A pullback ensues, sending price back to the breakout and it moves sideways from then on.
-- Thomas Bulkowski
See Also
|
Support this site! Clicking any of the books (below) takes you to
Amazon.com.
| My novels: |
 
 
 
 
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Why do black widow spiders kill their males after mating? To stop the snoring before it starts.
on 