lauralea

Harmonic Patterns ABC Bullish

Long
NASDAQ:SKYW   SKYWEST INC
I see the airlines trading in an ABC bullish pattern
Stop is under C which would be around 28 or below for SKYW . But UAL , HA, LUV, DAL, SAVE, JBLU , AAL are all trading in this pattern but would all have different entries, targets and stops of course.
Not a recommendation, just an observation
Markets demonstrate repetitive swings and harmonic patterns emerge. Fibonacci can help but also looking at resistance zones above you. The tops and bottoms of gaps above you are usually going to cause a problem and volume is need to push through. A lot to be aware of, volume , indicators, candles, patterns, news..it can be a lot to absorb. But the great thing about this pattern is how close your stop is to your entry.
AB=CD is an example of the symmetry that can be found in the market.
There is also a bearish ABC pattern as well. Bullish AB=CD patterns are formed after a prolonged downtrend and bearish AB=CD are formed after a prolonged uptrend
A PCZ zone is calculated "Point of Completion Zone". We are all different and looking at hard core resistance zones can change your zones. News and earnings also contribute as well as overall market sentiment. Every stock or commodity is different...so use your indicators such as RSI as well. And remember you are not the only one seeing and trading these patterns.

The target zones are added to your point of break out. A conservative trader may be happy with hitting B after entering at C. Things such as earnings and resistance zones, as well as news can change your target zones as well
The pattern consists of three legs, with two equal legs labelled AB and CD, together they form a zig-zag shape. It can be used in any financial market and on any time frame.
The first leg (A-B) is formed as the price rises from A to B. The retracement (from B to C) can be between 38.2% to 78.6% of the A-B leg, however, an ideal pattern has a retracement of 61.8% to 78.6%. (some may short this leg)

At point C, the price switches direction again and continues its original uptrend. This leg (C-D) slopes upwards, parallel with the A-B leg and should ideally be the same length as the A-B leg when it completes. The ideal AB=CD pattern is equal in time and price, with point D being an Fibonacci extension between 127%-161.8% of the B-C leg. But as we all know, nothing in life or trading is always "ideal" and that is where our indicators, support and resistance , and candles can help us
… the AB=CD pattern helps you identify when a price is about to change direction so that you can buy when prices are low and sell when they are high.
… the pattern consists of three legs, with two equal legs labelled AB and CD, together they form a zig-zag shape
… it can be used in any financial market and on any time frame.
… when a market is trending upwards, the first leg (A-B) is formed as the price rises from A to B.
… at point B, the price switches direction and retraces down sharply to form the B-C leg – ideally a 61.8% or 78.6% retracement of the price increase between points A and B.
… the price then continues its original uptrend, forming a C-D leg that should be the same length as the A-B leg.
… once you have decided where you think the pattern will complete (point D), you should place a sell order at this point

I do not short the market as a rule, but if someone knows their stuff and like to short, they could short the stock or commodity on leg B to C and then again at the PCZ (point of completion zone) or "D" as the stock heads down again to resume it's harmonic patterns once again

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