Prices peak, curve downward, and then around to form a lower peak. The price pattern looks like the letter “J” reversed.
Percent of successful formations – 52%
Failure rate – 3%
Average time to throwback completion – 2-3 hrs
Compute the height of the scallop by taking the difference between the right-edge high to the lowest low in the formation. Subtract the difference from the lowest low. The result is the minimum price target.