lauralea

Bullish Cypher Pattern

Long
NYSE:BDX   Becton, Dickinson and Company
Price is hitting the prior gap down and experiencing resistance but is trying to move through it. May cause a pull back. Entry level is quite a ways underneath, but you never know what Mr Market will do (o:

The cypher is a five point harmonic chart pattern, made up of points XABCD. The cypher is easy to spot on a chart because it has a characteristic wave like appearance displaying either rising peaks or falling valleys..

You can trade the cypher like other harmonic patterns , by waiting for a reversal at the final point and then using pending orders to profit from any potential breakout..

In any cypher , points X, C and D are the critical points. For a bullish cypher , X should be the pattern low and C the pattern high. A bearish cypher makes its high at X and its low at C..

Price targets
Set the price targets for the cypher at the Fibonacci levels between point D and point C. To work out the precise targets use a Fibonacci retracement tool and mark the points on the chart between D and C.

Possible T2 330.2 to 360 (long term) and would only occur under favorable market conditions or further down the road as a rule. These are the fib levels corresponding approximately to 127 and 161%) I focus on Targets 1 and keep a look out for resistance levels and overbought conditions a long the way..

Not a recommendation..just an observation. I've been in this trade since long entry level and it has been good to me so far.
Be sure to place your stop, if you use one which is a rule among most traders, but a rule that I rarely follow, but I know I should. Mental stops are really not encouraged by most. (I was stopped out on TNDM today when it went down a ways below D only to return. I put the stop there yesterday because I was concerned and BOOM, possible shakeout looking for stops. Anyway BDX also also retested D a few times before travelling up...

I have noticed price often retests D in harmonic patterns . I added a new rule, and that is wait for the retest! LOL Then enter with an uptrend and I did not do that on TNDM . We live and we learn (o: