Let's look at the bullish example. There is a rise via XA. B retraces 0.382 to 0.5 of XA. BC retraces 0.382 to 0.886 of AB. CD is a 1.618 to 2.618 extension of AB. D is at a 0.886 retracement of XA. D is the area to look for a long, although the wait for the price to start rising before doing so. A stop loss can be placed not far below.
For the bearish pattern, look to short near D, with a stop loss not far above.
For the bearish pattern, look to short near D, with a stop loss not far above.