As of 12/05/2024
  Indus: 44,766 -248.33 -0.6%  
  Trans: 16,976 -190.93 -1.1%  
  Utils: 1,047 +2.22 +0.2%  
  Nasdaq: 19,700 -34.86 -0.2%  
  S&P 500: 6,075 -11.38 -0.2%  
YTD
 +18.8%  
 +6.8%  
 +18.8%  
 +31.2%  
 +27.4%  
  Targets    Overview: 12/02/2024  
  Down arrow44,000 or 46,000 by 12/15/2024
  Down arrow17,025 or 18,000 by 12/15/2024
  Down arrow1,025 or 1,100 by 12/15/2024
  Up arrow20,000 or 18,500 by 12/15/2024
  Up arrow6,200 or 5,900 by 12/15/2024
As of 12/05/2024
  Indus: 44,766 -248.33 -0.6%  
  Trans: 16,976 -190.93 -1.1%  
  Utils: 1,047 +2.22 +0.2%  
  Nasdaq: 19,700 -34.86 -0.2%  
  S&P 500: 6,075 -11.38 -0.2%  
YTD
 +18.8%  
 +6.8%  
 +18.8%  
 +31.2%  
 +27.4%  
  Targets    Overview: 12/02/2024  
  Down arrow44,000 or 46,000 by 12/15/2024
  Down arrow17,025 or 18,000 by 12/15/2024
  Down arrow1,025 or 1,100 by 12/15/2024
  Up arrow20,000 or 18,500 by 12/15/2024
  Up arrow6,200 or 5,900 by 12/15/2024

Bulkowski on Ascending Scallops

Statistics updated on 8/26/2020.

For more information on this pattern, read Encyclopedia of Chart PatternsEncyclopedia 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.

-- Tom Bulkowski

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Overview
Important Results
Identification Guidelines
Trading Tips
Example
See Also

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.

Shown is an ascending scallop chart pattern
Ascending Scallop

Ascending Scallop: Identification Guidelines

CharacteristicDiscussion
Price trendUpward leading to the chart pattern.
ShapeThe chart pattern looks like the letter J. Find two peaks with a rounded valley in between and a higher right peak.
NarrowingScallops tend to be wider near the start of a price trend than near the end.
Breakout, confirmationA 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.
Top of page More

Ascending Scallop: Trading Tips

Consult the associated figures on the right.

Trading Tactic Explanation Ascending scallop measure rule
The Measure Rule
Ascending scallop with handle buy point
Scallop Handle
Measure ruleCompute 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.
HandleWhen 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.
StopPlace 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 volumeAscending scallops with heavy breakout volume outperform. The link to the left provides more information while this link provides performance information.
Yearly middleUpward breakouts from scallops in the middle third of the yearly price range do best. See the link to the left for more information.
ThrowbackThrowbacks hurt post breakout performance. The link on the left defines a throwback and this link gives performance information.
SeriesAscending scallops in a rising price trend tend to get shorter and narrower as the trend end approaches.
Top of page More

Ascending scallop chart pattern example

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.

-- Thomas Bulkowski

Top of page More

See Also

 

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