As of 12/20/2024   Indus: 42,840 +498.02 +1.2%     Trans: 15,892 +32.54 +0.2%     Utils: 986 +14.76 +1.5%     Nasdaq: 19,573 +199.83 +1.0%     S&P 500: 5,931 +63.77 +1.1%	YTD  +13.7%   0.0%    +11.9%    +30.4%    +24.3%	Targets    Overview: 12/12/2024     44,200 or 41,750 by 01/01/2025   16,100 or 17,700 by 01/01/2025   1,050 or 975 by 01/01/2025   20,500 or 19,300 by 01/01/2025   6,100 or 5,775 by 01/01/2025
Chart Pattern Indicator: on 12/5/24

As of 12/20/2024   Indus: 42,840 +498.02 +1.2%     Trans: 15,892 +32.54 +0.2%     Utils: 986 +14.76 +1.5%     Nasdaq: 19,573 +199.83 +1.0%     S&P 500: 5,931 +63.77 +1.1%	YTD  +13.7%   0.0%    +11.9%    +30.4%    +24.3%
Targets    Overview: 12/12/2024     44,200 or 41,750 by 01/01/2025   16,100 or 17,700 by 01/01/2025   1,050 or 975 by 01/01/2025   20,500 or 19,300 by 01/01/2025   6,100 or 5,775 by 01/01/2025
Chart Pattern Indicator: on 12/5/24

Bulkowski on Descending Scallops

Statistics updated 8/26/2020.

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

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

Descending Scallop: Important Bull Market Results

The above numbers are based on over 2,000 of perfect trades. See the glossary for definitions.

Descending Scallop: Identification Guidelines

Descending Scallop: Trading Tips

Consult the associated figure on the right.

Trading Tactic Explanation The Measure Rule 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 volume Descending scallops with upward breakouts on heavy volume outperform. Gaps Trade descending scallops with breakout day gaps. Height Trade tall patterns with downward breakouts, short patterns with upward breakouts. Stops For 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: 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

See Also

• Trading pattern pairs: descending scallop
• Descending scallops slider quiz.
• Have you found a rounding bottom instead?
• Cup with handles have a poor track record. Find out why.
• 3 tips to help you pick stocks.
• Selling tips. Here's a dozen selling tips every trader should know.
• Trade review. Reviewing trades can lead to profits.

Every morning is the dawn of a new error.