As of 05/13/2022   Indus: 32,197 +466.36 +1.5%     Trans: 14,456 +136.14 +1.0%     Utils: 993 +9.90 +1.0%     Nasdaq: 11,805 +434.04 +3.8%     S&P 500: 4,024 +93.81 +2.4%	YTD -11.4%   -12.3%    +1.2%   -24.5%   -15.6%	Targets    Overview: 04/26/2022     33,500 or 30,500 by 06/01/2022   16,300 or 13,900 by 05/15/2022   950 or 1,100 by 05/15/2022   12,800 or 11,000 by 06/01/2022   4,250 or 3,850 by 06/01/2022
CPI (updated daily): on 5/13/22

As of 05/13/2022   Indus: 32,197 +466.36 +1.5%     Trans: 14,456 +136.14 +1.0%     Utils: 993 +9.90 +1.0%     Nasdaq: 11,805 +434.04 +3.8%     S&P 500: 4,024 +93.81 +2.4%	YTD -11.4%   -12.3%    +1.2%   -24.5%   -15.6%
Targets    Overview: 04/26/2022     33,500 or 30,500 by 06/01/2022   16,300 or 13,900 by 05/15/2022   950 or 1,100 by 05/15/2022   12,800 or 11,000 by 06/01/2022   4,250 or 3,850 by 06/01/2022
CPI (updated daily): on 5/13/22

Bulkowski on Inverted and Descending Scallops

Statistics updated on 8/27/2020.

For more information on this pattern, read Encyclopedia of Chart Patterns, pictured on the right. The book gives a complete review of the chart pattern, including tour, identification guidelines, focus on failures, performance statistics, trading tactics, and sample trade. Below is just a sliver of the information contained in the book.

Inverted and descending scallops are robust performers in bull markets. Once the downward trend ends - if you can tell when that occurs - then buy and ride the new uptrend. Discovered by Thomas Bulkowski in mid 2004, but others may have found them sooner.

Important Results Identification Guidelines Trading Tips Example See Also

Inverted and Descending Scallop

Inverted and Descending Scallops: Identification Guidelines

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Inverted and Descending Scallops: Trading Tips

Trading Tactic Explanation Measure rule Compute the height from highest peak (point B in the Measure Rule chart to the right) to lowest valley (C) then multiply it by the above 'percentage meeting price target.' Subtract the result from the lowest valley in the pattern (C) to get a price target for a downward breakout. Add the height to the top of the pattern for an upward breakout. Short For downward breakouts, short the stock when price closes below the lowest valley in the pattern (C in the Measure Rule figure to the right). Cover If price retraces (rises) 67% of the decline from B to C in the Measure Rule figure to the right, then cover the short. Volume trend Scallops with upward breakouts and a rising volume trend perform best. Confirmation Wait for confirmation before placing a trade. Height Tall scallops perform better than short ones. Trend Scallops get narrower and shorter the lower they appear in a price trend. Throwbacks Throwbacks hurt performance.

The Measure Rule

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Inverted and Descending Scallops: Example

The above figure shows an example of an inverted and descending scallop chart pattern. Point A begins the inverted scallop pattern and price peaks at B and then trends down to C, the end of the scallop. This one forms a handle, D, and that is quite common. Price resumes the downtrend after the handle completes.

-- Thomas Bulkowski

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