As of 04/19/2019
  Industrials: 26,560 +110.00 +0.4%  
  Transports: 10,988 +52.62 +0.5%  
  Utilities: 772 +1.55 +0.2%  
  Nasdaq: 7,998 +1.98 +0.0%  
  S&P 500: 2,905 +4.58 +0.2%  
YTD
 +13.9%  
 +19.8%  
 +8.3%  
 +20.5%  
 +15.9%  
  Tom's Targets    Overview: 04/12/2019  
  Up arrow26,900 or 25,500 by 05/01/2019
  Up arrow11,200 or 10,500 by 05/01/2019
  Up arrow825 or 755 by 05/01/2019
  Up arrow8,100 or 7,700 by 05/01/2019
  Up arrow2,975 or 2,800 by 05/01/2019
As of 04/19/2019
  Industrials: 26,560 +110.00 +0.4%  
  Transports: 10,988 +52.62 +0.5%  
  Utilities: 772 +1.55 +0.2%  
  Nasdaq: 7,998 +1.98 +0.0%  
  S&P 500: 2,905 +4.58 +0.2%  
YTD
 +13.9%  
 +19.8%  
 +8.3%  
 +20.5%  
 +15.9%  
  Tom's Targets    Overview: 04/12/2019  
  Up arrow26,900 or 25,500 by 05/01/2019
  Up arrow11,200 or 10,500 by 05/01/2019
  Up arrow825 or 755 by 05/01/2019
  Up arrow8,100 or 7,700 by 05/01/2019
  Up arrow2,975 or 2,800 by 05/01/2019

Bulkowski's Descending Scallops

 

Statistics updated 3/27/2019.

For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right.

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

-- Tom Bulkowski

$ $ $

Descending scallops are backward J-shaped chart patterns which occur most often in downward trends.

Important Results
Identification Guidelines
Trading Tips
Example
See Also

 

A descending scallop chart pattern appears

Descending Scallop
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Descending Scallop: Important Bull Market Results

Overall performance rank for up/down breakouts (1 is best): not ranked
Break even failure rate for up/down breakouts: 15%; 18%
Average rise/decline: 40%; 16%
Throwback/pullback rate: 68%; 65%
Percentage meeting price target for up/down breakouts: 53%; 34%

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

Descending Scallop: Identification Guidelines

CharacteristicDiscussion
Price trendUsually downward leading to the descending scallop but you'll see them in retraces of an uptrend, too.
ShapeThe descending scallop looks like the backward letter J. Find two peaks with a rounded valley in between and the left peak higher than the right one.
Breakout, confirmation A close above the top of the chart pattern (it used to be the right lip) or below the lowest valley (downward breakout) signals a breakout, confirming the pattern as a valid one.
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Descending Scallop: Trading Tips

Consult the associated figure on the right.

Trading TacticExplanation
Measure rule Compute the height from the highest peak in the pattern (A) to the lowest valley (B) and then multiply it by the above 'percentage meeting price target.' Add it to the price of the right peak (upward breakouts, point C) or subtract it from the lowest valley (downward breakouts, point B) to get a target price (D).
Breakout volumeDescending scallops with heavy breakout volume outperform.
GapsTrade descending scallops with breakout day gaps.
HeightTrade tall patterns with downward breakouts, short patterns with upward breakouts.
StopsFor upward breakouts, place a stop below the lowest valley (B) if it's not too far away. For downward breakouts, a stop above the right peak (C) works well.
Reversal Descending scallops acting as reversals of the downward price trend (that is, breakout upward after a downtrend) do best.
Descending scallop chart pattern measure rule
The Measure Rule
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Descending Scallop: Example

Descending scallop chart pattern example

Two descending scallop chart patterns appear in the figure above. The first one begins at point A and ends at B. The second begins at B and completes at C. Both scallops breakout downward when price closes below the bottom of the associated chart pattern.

-- Thomas Bulkowski

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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.
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 Bumper's Story Head's Law
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