As of 12/08/2021
  Indus: 35,755 +35.32 +0.1%  
  Trans: 16,305 -50.62 -0.3%  
  Utils: 933 -1.49 -0.2%  
  Nasdaq: 15,787 +100.07 +0.6%  
  S&P 500: 4,701 +14.46 +0.3%  
YTD
 +16.8%  
 +30.4%  
 +7.9%  
 +22.5%  
 +25.2%  
  Targets    Overview: 11/30/2021  
  Up arrow36,000 or 34,000 by 12/15/2021
  Up arrow17,100 or 15,350 by 12/15/2021
  Up arrow950 or 900 by 12/15/2021
  Up arrow16,250 or 15,125 by 12/15/2021
  Up arrow4,750 or 4,480 by 12/15/2021
CPI (updated daily): Arrows on 12/6/21
As of 12/08/2021
  Indus: 35,755 +35.32 +0.1%  
  Trans: 16,305 -50.62 -0.3%  
  Utils: 933 -1.49 -0.2%  
  Nasdaq: 15,787 +100.07 +0.6%  
  S&P 500: 4,701 +14.46 +0.3%  
YTD
 +16.8%  
 +30.4%  
 +7.9%  
 +22.5%  
 +25.2%  
  Targets    Overview: 11/30/2021  
  Up arrow36,000 or 34,000 by 12/15/2021
  Up arrow17,100 or 15,350 by 12/15/2021
  Up arrow950 or 900 by 12/15/2021
  Up arrow16,250 or 15,125 by 12/15/2021
  Up arrow4,750 or 4,480 by 12/15/2021
CPI (updated daily): Arrows on 12/6/21

Bulkowski on Descending Scallops

 

Statistics updated 8/26/2020.

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

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-- Tom Bulkowski

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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): 29 out of 39/12 out of 36
Break even failure rate for up/down breakouts: 14%/18%
Average rise/decline: 39%/16%
Throwback/pullback rate: 67%/65%
Percentage meeting price target for up/down breakouts: 52%/34%

The above numbers are based on over 2,000 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. The pattern breaks out downward 78% of the time.
Top of page

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 upward breakouts on heavy 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
Top of page

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

 

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