Definition
A scallop is a curved continuation pattern that looks like the letter 'J' or its mirror image. In an uptrend, an ascending scallop forms a rounded dip followed by a higher rise — a J shape — and the trend then continues upward. In a downtrend, the pattern appears as a reverse J, and the decline resumes.
Unlike sharp, angular formations, a scallop has a smooth, rounded portion that gives it its distinctive curl. It is a member of the continuation family: it represents a pause and a curving consolidation within a trend, not a reversal of it.
Why it matters
How it works
A scallop begins when a trending market pauses and dips, then curves back into the trend's direction and pushes to a new extreme — completing the J. The smooth curve marks a controlled consolidation in which the trend's dominant side regroups rather than surrenders. The pattern is generally treated as confirmed when price moves beyond the high of the prior J for an ascending scallop, or beyond the low for a descending one.
Because scallops tend to repeat along a trend, recognizing one can help a trader frame the trend's likely staging points — though the curve, like all patterns, is clearest in hindsight.