Ascending Scallops

As of 12/06/2022

Indus: 33,596 -350.76 -1.0%

Trans: 13,898 -150.08 -1.1%

Utils: 979 +8.73 +0.9%

Nasdaq: 11,015 -225.05 -2.0%

S&P 500: 3,941 -57.58 -1.4%

YTD

-7.5%

-15.7%

-0.2%

-29.6%

-17.3%

Targets Overview: 12/01/2022

35,500 or 32,800 by 12/15/2022

13,400 or 14,500 by 12/15/2022

1,000 or 925 by 12/15/2022

12,000 or 10,600 by 12/15/2022

4,250 or 3,850 by 12/15/2022

CPI (updated daily):

on 12/5/22

As of 12/06/2022

Indus: 33,596 -350.76 -1.0%

Trans: 13,898 -150.08 -1.1%

Utils: 979 +8.73 +0.9%

Nasdaq: 11,015 -225.05 -2.0%

S&P 500: 3,941 -57.58 -1.4%

YTD

-7.5%

-15.7%

-0.2%

-29.6%

-17.3%

Targets Overview: 12/01/2022

35,500 or 32,800 by 12/15/2022

13,400 or 14,500 by 12/15/2022

1,000 or 925 by 12/15/2022

12,000 or 10,600 by 12/15/2022

4,250 or 3,850 by 12/15/2022

CPI (updated daily):

on 12/5/22

Bulkowski on Ascending Scallops

For more information on this pattern, read Encyclopedia of Chart Patterns

Encyclopedia of Chart Patterns 2nd Edition book.

, pictured on the right. That book gives a complete review of the chart pattern, compared to what is described below.

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

Ascending Scallop: Overview

Ascending scallops are arguably the most common chart pattern. They are mid-list performers.

Important Bull Market Results for Ascending Scallops

Overall performance rank for up/down breakouts (1 is best): 20 out of 39/22 out of 36

Break even failure rate for up/down breakouts: 11%/23%

Average rise/decline: 42%/15%

Throwback/pullback rate: 68%/64%

Percentage meeting price target for up/down breakouts: 62%/29%

The above numbers are based on more than 1,600 hundreds of perfect trades. See the glossary for definitions.

Ascending Scallop

Ascending Scallop: Identification Guidelines

Characteristic	Discussion
Price trend	Upward leading to the chart pattern.
Shape	The chart pattern looks like the letter J. Find two peaks with a rounded valley in between and a higher right peak.
Narrowing	Scallops tend to be wider near the start of a price trend than near the end.
Breakout, confirmation	A close above the highest high signals an upward breakout. Downward breakouts are a close below the pattern's low. A breakout confirms the scallop as a valid chart pattern.

Ascending Scallop: Trading Tips

Trading Tactic	Explanation	The Measure Rule Scallop Handle
Measure rule	Compute the height from the highest peak (A) to the lowest valley in the pattern (B) and then multiply it by the above 'percentage meeting price target.' Add the difference to the highest peak (A) to get a price target for upward breakouts (C) or subtract it from the lowest valley (B) for downward breakouts to get a target price. The link to the left provides more information on the measure rule.
Handle	When price peaks on the right of the pattern, it often retraces, forming a handle or another scallop. When price bottoms, buy. The figure on the lower right shows an example.
Stop	Place a stop below the lowest valley (B in the figure to the upper right) if it's not too far away. The associate link provides more information about stop placement.
Breakout volume	Ascending scallops with heavy breakout volume outperform. The link to the left provides more information while this link provides performance information.
Yearly middle	Upward breakouts from scallops in the middle third of the yearly price range do best. See the link to the left for more information.
Throwback	Throwbacks hurt post breakout performance. The link on the left defines a throwback and this link gives performance information.
Series	Ascending scallops in a rising price trend tend to get shorter and narrower as the trend end approaches.

Ascending Scallop: Example

The figure on the right shows an example of an ascending scallop chart pattern. Price bottoms at point A and then rises to B where it rounds downward to C.

To calculate a price target, subtract the price of valley A from peak B. That finds the height. Multiply the height by the 'percentage meeting price target' from Important Bull Market Results table near the top of this page, and add the result to the price at B.

Place a stop loss order a few pennies below C if the ascending scallop forms a handle. If no handle appears, a stop below A may be too far away, but consider it. Raise the stop as price rises.

For downward breakouts, subtract the B-A height from A to get a lower target. Ignore targets less than zero.