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56 It is important to notice the bearish price bars that developed after the stock hit the potential reversal zone. The stock started to make new lows and failed to close above any of the prior days high. The price action was clearly indicating a reversal was at hand. Even if you waited a few days for reversal confirmation, you still would have been selling very close to a significant high in the stock. The next chart of Intel formed a very nice geometric pattem that yielded quite a reversal. The stock reversed a point beyond a potential reversal zone that included three harmonic calculations. The most important number, the .786 of XA was projected at 65 3/4. This converged very close to the 1.618 ofthe leg at 65 1/2. 68 66 64 62 60 58 56  ©BigCharts.com I: DAILY 80 60 40 20 299381979�
The AB=CD pattem was not exact but stiU hamionic. The AB leg was 7 7/16 points. Unfortunately, projecting this exact length from point at 56 7/8 yielded a harmonic number that is about 11/2 points below the .786. However, the 1.27 altemate calculation of the AB=CD pattem yielded a number that complements the .786 much better. This projection is slightly more than a 1/2 point above the ,786 at 66 5/16. So, these three numbers defined an area between 65 1/2 and 66 5/16 for a possible trade execution. The stock reversed at 66 3/4, which was a point above the .786 and less than a 1/2 point above the 1.27 altemate calculation of the AB=CD. Another interesting aspect of this set-up was the candlestick that formed in the potential reversal zone. On the day Intel hit this area, the stock formed a bullish hammer. The next day was even more significant, as the stock another bearish candlestick, and it could not continue its rally. .786XA @ 65 3/4 1.618 651/2 INTEL (INTC): DAILY i.27ABCD @ 66 5/16. BEAmSH GARTLEY PRICE ACTION IN POTENTIAL REVERSAL ZONE  
These price bar formations are the signals to look for to determine the validity of a reversal. Although the price action was quite strong the day it hit the potential reversal zone, the following two days indicated the reversal at hand. In this situation, your stop loss was very limited. You probably would have closed out the trade if the stock exceeded the initial point (X) at 68 3/4. Depending on your perception of this set-up - which, I believe, was very harmonic - you probably would have placed your stop loss above 69. The stock did not test this level, and it reversed 1 within a few days after hitting the potential reversal zone. In the next example, I included a chart of Warner-Lambert because the pattem was very clear but the execution was somewhat tricky. The .786 of XA was projected at 72 1/8, while the AB=CD was calculated at 72 3/4.  74 72 70 64 62 ) I ume - ©BigCharts.com WARNER-LAMBERT (WLA): DAILY BEARISH GARTLEY  10 g
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