back start next
[start] [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [ 46 ] [47] [48] [49] [50] [51] [52] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72] [73] [74] [75] [76] [77] [78] [79] [80] [81] [82] [83] [84] [85] [86] [87] [88] [89] [90] [91] [92] [93] [94] [95]
46 Bearish Alternate .618 or .786 AB=CD The .618 or .786 bearish altemate calculation of the AB=CD pattem does occur frequently. I believe that this pattem is associated with false breakouts. Often, a stock will rally past point but fail to continue higher. In this case, the stock usually reverses sharply because it could not break above the previous resistance. ab=cd .786ab = cd .618ab = cd bearish .618 or .786 ab = cd sell at point d! Again, it is important to remember that these altemate calculations are most effective when other harmonic calculations converge in the same price area. Lets look at the following example. Computer Associates formed a nice alternate AB=CD that reversed just past the .618 projection of the AB leg. The .618 of AB projected from point resulted in a completion at 50 3/8. This calculation converged with the 1.618 ofthe leg at 50 15/16. The stock rallied to 51 5/8 and reversed.
COMPUTER ASSOCIATES (CA): DAILY BEARISH .618AB=CD 55 50 45 40 35 30 0BigCharts.com Rug Sep Oct Hoy Dec 99 Feb Mar This potential reversal zone, between 50 3/8 and 50 15/16, proved to be difficult resistance for the stock. Within a few days after hitting this area, the stock declined sha ly. I cant emphasize enough that these altemate calculations should merely complement other harmonic projections. When a distinct AB=CD pattem is present, these calculations can provide more evidence of a potential reversal. Also, altemative projections utilizing the .618 or .786 are not as fiequent as the 1.27 or 1.618 of AB leg. As I will illustrate in the section on pattems, they are most effective in defining critical tuming points more clearly.
AB=CD with ab=cd There many instances where a smaller ab=cd pattem will exist within one ofthe legs of a larger AB=CD. When this occurs, the smaller ab=cd will often complete in the same area as the larger AB=CD. Although it can exist in the first leg (AB) or even both legs, a smaller ab=cd usually will be found in the CD leg of the larger AB=CD. The existence of a smaller ab=cd will complement the other harmonic numbers and will help further define the potential reversal zone. I believe that the completion point of the larger AB=CD is more important than the smaller ab=cd. But, the completion point of an ab=cd pattern within a larger AB=CD does signify an extremely harmonic setup, and it can be a cmcial potential reversal point. Bullish AB=CD with ab=cd BULLISH AB=CD MINOR ab=cd WITHIN MAJOR AB = CD BUY AT POINT D! When two AB=CD pattems converge at the same area, you must assume that a reversal is highly probable. If a stock forms a pattern like this illustration, the entry point will be practically obvious. Even if the potential
[start] [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [ 46 ] [47] [48] [49] [50] [51] [52] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72] [73] [74] [75] [76] [77] [78] [79] [80] [81] [82] [83] [84] [85] [86] [87] [88] [89] [90] [91] [92] [93] [94] [95]
