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] 76 It is uncanny at times that a major Fibonacci projection can converge with a clear pattem and provide greater confirmation of a potential reversal, as this chart illustrates. In this example, it is important to notice how each thrust literally sticks out on the chart. When you see three symmetrical thmsts like these, it is imperative to recognize that a significant opportunity is present. Although the price action in each drive exceeded the 1.27 projection, the pattem is very symmetrical and quite clear. I have included an enlarged chart of the three drives.119 7/8 1163/161 1 { ): DAILYBEARISH THREE DRIVESPRICE ACTION IN THE roTENTIAL REVERSAL ZONE©SlgCharts.comli.mmllll 111llllllllliilllll!22 24 29 31998 12 14 19 21 25 27 2g=eb 3II 16 18The most important point in this set-up was the third drive. A 1.27 projection of the second drive suggested that the third drive should complete at 119 7/8. This area was complemented by the significant 2.618 projection, calculated at 116 3/16. So, the actual trade set-up suggested waiting until at least this area - somewhere around 120 - for a potential selling opportunity.The pattem indicated that the 1.27 was the better entry point than the 2.618 projection. The primary reason is that the second drive exceeded its 1.27 by several points. Also, the pattem was so clear that the 1.27 was a very likely price objective.Although this was a very clear pattem. Excite was rallying sha ly as it completed the third drive. On this day, the stock possessed an extreme price range. In these situations, you should respect this waming sign and wait for some type of reversal confirmation. On the next moming, the stock rallied above the potential reversal zone and then reversed sharply. The day after the reversal was complete, Excite clearly gapped down on the open and sold off sharply. In fact, the stock declined nearly 40% over the following two weeks.This execution might have been difficult since the price action was extremely volatile. The stock rahied over 300% in a few months! Despite this extreme action, the stock clearly reversed ft"om this harmonic area. This example illustrates the importance of gauging the price action in the potential reversal zone. Since the stock was rallying so strongly, you might have assumed that Excite was going to blow out the potential reversal zone. However, the stock clearly indicated a reversal at hand. Furthermore, the days after it hit the potential reversal zone, the price action was very bearish.Three Drives at a Major Fibonacci RetracementWhen a Three Drives pattem does not develop in an extreme price range, it is critical for the three drives to be completing at or near a significant Fibonacci retracement number. Other retracement calculations can provide further confirmation as to where the third drive will complete. In addition, it is very common to see the third drive exceed the previous two drives and hit the larger Fibonacci number. Therefore, as with all pattems, the retracement number from the larger leg will be the most significant.Bullish Three DrivesAt a Major Fibonacci RetracementThis Three Drives set-up is very harmonic, when it corresponds with a major Fibonacci retracement. The Fibonacci retracement complements the pattem and the projection should converge with the third drive.bullish three drives at a major hbonacci retracement: buy at 3!The next example will clearly illustrate the concept of this pattem, as Bristol Myers Squibb completed a very nice Three Drives that converged with a major .618 retracement. These set-ups are very harmonic because of the clear pattem and Fibonacci projection.[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]