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Bulkowskis Three Peaks and Domed House

Thomas Bulkowskissuccessful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

Written by and copyright © 2005-2018 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. SeePrivacy/Disclaimerfor more information.

Three peaks and domed house and its mirror, domed house and three peaks, are patterns discovered by George Lindsay certainly before its publication in 1971 inEncyclopedia of Stock Market Techniques.I searched for this pattern extensively for inclusion in the first edition of my bookEncyclopedia of Chart Patterns Second Edition

(the second edition is pictured on the right), but I couldnt find enough samples, so I never included it. Lindsay says it appears in the Dow Jones industrial average.

I think you will find that the more complicated the chart pattern, the less often they appear in a stock, or in this case — the Dow Jones industrial average — and the less often they work as expected. Three peaks and domed house with domed house and three peaks — both chart patterns are very complicated as you will see.

It might be easier to treat the pattern as two separate ones, atriple topandrounded toporhead-and-shoulders top, and trade them as individual patterns.

Identification Guidelines for Three Peaks and Domed House

The following guidelines identified by Lindsay are keyed to the above figure.

Look for three peaks rising from the base at point 1 and 2 in a sharp price uptrend to peak 3.

The peak usually looks somewhat flat on top.

Price retraces the rise from 2 farther than expected.

Price drops to the valleys between the peaks.

The peaks appear similar in shape and top out near the same price as peak 3. Symmetry between the three peaks is usually obvious.

The three peaks take about 8 months to form, give or take.

A severe drop begins, taking price down to point 10 in two waves, 7 to 8 and 9 to 10. This forms whats called the separating decline which separates the three peaks pattern from the remainder of the formation.

Always lower than either points 4 or 6 but often both. If that doesnt happen, then its not a separating decline.

After you have a valid separating decline, look for a domed house pattern.

Price forms a base leading to the dome. Price must rise from the low at 10 and then must form two more lows at 12 and 14.

Price rises to the peak at 15 in a swift advance, forming the wall of the first story.

This is the roof of the first story, composed of 5 reversals beginning with the first one at 16 and ending at 20. The price movement has changed from upward in the first story wall (points 14 to 15) to a horizontal but choppy sideways move 15 to 20.

The rise resumes at point 20 forming the wall of the second story, which takes price to 21.

Price moves in a choppy manner forming a dome or roof on the second story.

The move from points 14 to 23 takes 7 months, and 8 to 10 days.

After peaking at 25, price tumbles to 26, retraces to 27 before heading lower to 28, completing the pattern. Point 27 often tops out near the price level of point 15, forming the right edge of the first story roof.

Price bottoms near point 10. This decline may not be a straight-line affair, but it always happens.

The rise from 14 to 15 balances the decline from 27 to 28.

The rise from 20 to 21 balances the decline from 25 to 26.

Lindsay gives several examples and I list them here.

July 26, 1893 (point 1) to Sep 4, 1895 (point 23) in the Dow Jones 20 stock average.

July 26, 1910 (point 1) to Sep 30, 1912 (point 23) in the Dow Industrials.

The below chart shows his most recent example cited in his paper.

October 9, 1966 to January 8, 1969 (weekly scale shown).

Point 3 to point 23 in the Dow Industrials:

The below chart shows his most recent example cited in his paper.

Aug 3, 1959 to Dec 13, 1961 (weekly scale shown)

Lindsay then shows the mirror of the pattern, forming adomed house followed by three peaks. One example is from April 1938 to June 1940 with others from December 8, 1890 to April 5, 1893 (Dow Jones 20 stock average) and Sep 24, 1900 to Feb 16, 1903 (Dow Industrials) and Dec 15, 1905 to Jan 7, 1907.

The below chart shows his most recent example cited in his paper.

April 1938 to June 1940 (weekly scale shown)

Triple tops can be part of the three peaks and the domed house. Find out why.

You could be looking at a complex head-and-shoulders top. Be sure to view this page, too.

Visit the visual chart pattern index to hunt for other chart patterns.

The alphabetical chart pattern index covers more topics than the visual index.

If you prefer candlesticks, then visit over 100 of them in the alphabetical index.

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