The pattern is recognized by the exclusive 78.6% of XA retracement at point B; and the 1.27 XA projection at point D.
X-A: A strong leg which ends at an important level.
A-B: Should retrace precisely 78.6% of X-A.
B-C: Should retrace between 38.2 to 88.6 % of A-B. This leg should not extend beyond point A.
C-D: The most important leg to confirm the . C-D should extend 127% of X-A and not more than that.
C-D=A-B or C-D=1.27 A-B : Another important confirmation, C-D leg should complete between 1 to 1.27 times A-B
B-C Projection: Point D should be at 1.618 to 2.24 B-C projection.
Pattern completes at point D so it is the most important point in the pattern. If all the above conditions are valid, a reversal is expected from this point.
# In an upward reversal is expected at point D, whereas in patterns a downward reversal is expected at point
# Normally a buy/sell order is placed at point D, expecting some sort of reversal, and targets are placed at 38.2% and 61.8% of A-X.
# A complete reversal should not be expected at point D in any . Only the further price can provide confirmations about trend
Trade safe, be healthy
Hit like/comment if this information is useful.
May all of us be victorious over the evil inside us -- Enjoy Dasehra