Let's analyze now a new setup which looks very strong. Price is moving in a corrective structure into a nice after a rally which broke a long term (black ). In the channel i have indetified a pattern with its D point at a very strong .
Butterfly's D point parameters:
- It's between 0.618 - 0.786 of the impulse leg which broke the long term .
- It's at the bottom line of the channel.
- At the same point we can see an .
- Looking to previous structure we see a strong horizontal level.
As for profit we can target the upper of the channel although i strongly believe that price can go beyond that and test 0.618 of the major move to the down.