As of 11/13/2019
  Indus: 27,784 +92.10 +0.3%  
  Trans: 10,843 -116.63 -1.1%  
  Utils: 844 +12.11 +1.5%  
  Nasdaq: 8,482 -3.99 0.0%  
  S&P 500: 3,094 +2.20 +0.1%  
YTD
 +19.1%  
 +18.2%  
 +18.4%  
 +27.8%  
 +23.4%  
  Targets    Overview: 10/31/2019  
  Up arrow28,200 or 27,100 by 12/01/2019
  Up arrow11,300 or 10,100 by 11/15/2019
  Up arrow870 or 800 by 12/01/2019
  Up arrow8,700 or 8,200 by 12/01/2019
  Up arrow3,150 or 2,950 by 11/15/2019
As of 11/13/2019
  Indus: 27,784 +92.10 +0.3%  
  Trans: 10,843 -116.63 -1.1%  
  Utils: 844 +12.11 +1.5%  
  Nasdaq: 8,482 -3.99 0.0%  
  S&P 500: 3,094 +2.20 +0.1%  
YTD
 +19.1%  
 +18.2%  
 +18.4%  
 +27.8%  
 +23.4%  
  Targets    Overview: 10/31/2019  
  Up arrow28,200 or 27,100 by 12/01/2019
  Up arrow11,300 or 10,100 by 11/15/2019
  Up arrow870 or 800 by 12/01/2019
  Up arrow8,700 or 8,200 by 12/01/2019
  Up arrow3,150 or 2,950 by 11/15/2019

Bulkowski's Roof

 

Statistics updated 6/14/2019.

My book, Encyclopedia of Chart PatternsEncyclopedia of Chart Patterns book., pictured on the left, discusses 63 chart patterns. The first and second editions don't cover the roof pattern, though. Sorry.

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

-- Tom Bulkowski

$ $ $

The roof pattern is one I discovered in early 2005. I thought of it as a half diamond but a friend called it a roof pattern and that's more descriptive. This pattern is rare and the performance isn't good either.

Roof chart pattern
Roof Chart Pattern

 

Roof: Important Bull Market Results

Overall performance rank for up/down breakouts (1 is best): 49 out of 56/27 out of 53
Break even failure rate for up/down breakouts: 25%; 22%
Average rise/decline: 35%; 15%
Throwback/pullback rate: 54%; 51%
Percentage meeting price target for up/down breakouts: 63%; 63%

The above numbers are based over 100 perfect trades. See the glossary for definitions.

Roof: Identification Guidelines

CharacteristicDiscussion
Daily or weekly chartI used the daily chart to locate roof patterns, but they may appear on other timeframes as well.
Price trendUsually upward leading to the pattern.
ShapeHas a horizontal or near horizontal bottom with up sloping trend in the first part of the pattern followed by a down-sloping trend in the last part of the pattern.
UptrendThe best performing roof patterns appear after a sharp rise like you sometimes see in diamond patterns.
SymmetricalThe two halves of the roof should appear symmetrical. Allow variations, but most look like an inverted V with price touching the horizontal bottom (in minor low) at least three times.
Head-and-shoulders topMake sure the pattern isn't a head-and-shoulders top or a complex head-and-shoulders top.
ConfirmationThe pattern confirms as valid when price closes outside the trendline boundary. The breakout can be in any direction.

Top of page More

Roof: Trading Tips

Trading TacticExplanation Roof chart pattern measure rule
The Measure Rule
Measure ruleReference the Measure Rule figure to the right. Compute the height (the difference between the roof's high, A, and the low, B) and then multiply it by the above 'percentage meeting price target.' Subtract the result from the lowest low in the pattern (B) to get a target. The Measure Rule figure to the right shows the measure for a downward breakout.
UptrendsThe best performing roofs appear at the top of uptrends lasting less than 3 months in duration. A strong downtrend usually follows a sharp uptrend, returning price back to (or slightly above) the launch point.
ConfirmationWait for confirmation before placing a trade because the breakout can be in any direction (downward predominates at 58% of the time).
PullbacksPullbacks hurt performance.
HeightTall patterns outperform short ones. Measure the height from highest peak to the horizontal bottom and divide it by the price of the horizontal bottom (the breakout price). Height to breakout price values over 8.73% (for downward breakouts, 9.17% for upward breakouts) are considered tall.

Top of page More

Roof: Example

Roof chart pattern example

The above figure shows an example of a roof chart pattern. Aren't you impressed?

Price crosses the pattern from top to bottom, touching a horizontal trendline at least three times in minor lows.

In this example the upward breakout occurs when price closes above the down-sloping trendline.

-- Thomas Bulkowski

Top of page More  

Other Roof Examples

See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:      New                  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

Copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved.
Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.
Some pattern names are registered trademarks of their respective owners.

Home Advertise Contact Donate Links Privacy/Disclaimer

We make a living by what we get, but we make a life by what we give.Smiley