As of 03/27/2020
Indus: 21,637 -915.39 -4.1%
Trans: 7,699 -346.29 -4.3%
Utils: 759 +1.01 +0.1%
Nasdaq: 7,502 -295.16 -3.8%
S&P 500: 2,541 -88.60 -3.4%
|
YTD
-24.2%
-29.4%
-13.7%
-16.4%
-21.3%
|
 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 03/27/2020
Indus: 21,637 -915.39 -4.1%
Trans: 7,699 -346.29 -4.3%
Utils: 759 +1.01 +0.1%
Nasdaq: 7,502 -295.16 -3.8%
S&P 500: 2,541 -88.60 -3.4%
|
YTD
-24.2%
-29.4%
-13.7%
-16.4%
-21.3%
| |
|
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 6/14/2019.
My book,
Encyclopedia of Chart Patterns
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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: Important Bull Market ResultsOverall 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. |
| Characteristic | Discussion |
| Daily or weekly chart | I used the daily chart to locate roof patterns, but they may appear on other timeframes as well. |
| Price trend | Usually upward leading to the pattern. |
| Shape | Has 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. |
| Uptrend | The best performing roof patterns appear after a sharp rise like you sometimes see in diamond patterns. |
| Symmetrical | The 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 top | Make sure the pattern isn't a head-and-shoulders top or a complex head-and-shoulders top. |
| Confirmation | The pattern confirms as valid when price closes outside the trendline boundary. The breakout can be in any direction. |
| Trading Tactic | Explanation | 
The Measure Rule
|
| Measure rule | Reference 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. | |
| Uptrends | The 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. | |
| Confirmation | Wait for confirmation before placing a trade because the breakout can be in any direction (downward predominates at 58% of the time). | |
| Pullbacks | Pullbacks hurt performance. | |
| Height | Tall 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. |
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
See Also
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