Roof

As of 11/29/2023

Indus: 35,430 +13.44 +0.0%

Trans: 14,817 +0.30 +0.0%

Utils: 862 -5.36 -0.6%

Nasdaq: 14,258 -23.27 -0.2%

S&P 500: 4,551 -4.31 -0.1%

YTD

+6.9%

+10.6%

-10.8%

+36.2%

+18.5%

Targets Overview: 11/29/2023

34,500 or 36,400 by 12/15/2023

14,500 or 15,800 by 12/15/2023

900 or 825 by 12/15/2023

13,700 or 14,450 by 12/15/2023

4,450 or 4,650 by 12/15/2023

Chart Pattern Indicator:

on 11/17/23

As of 11/29/2023

Indus: 35,430 +13.44 +0.0%

Trans: 14,817 +0.30 +0.0%

Utils: 862 -5.36 -0.6%

Nasdaq: 14,258 -23.27 -0.2%

S&P 500: 4,551 -4.31 -0.1%

YTD

+6.9%

+10.6%

-10.8%

+36.2%

+18.5%

Targets Overview: 11/29/2023

34,500 or 36,400 by 12/15/2023

14,500 or 15,800 by 12/15/2023

900 or 825 by 12/15/2023

13,700 or 14,450 by 12/15/2023

4,450 or 4,650 by 12/15/2023

Chart Pattern Indicator:

on 11/17/23

Bulkowski on Roof Patterns

My book, Encyclopedia of Chart Patterns

, 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.

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: Important Bull Market Results

The above numbers are based over 300 perfect trades. See the glossary for definitions.

Roof: Identification Guidelines

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.

Roof: Trading Tips

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.
Downtrends	The best performing roofs appear in downtrends, but they will be rare.
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 8.7% (for downward breakouts, 9.2% for upward breakouts) are considered tall.

Roof: 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.