here we have a very nice pattern on oil that was formed on the 28th and had an initial reaction. the market then proceeded to find previous at a specific level when the pattern completed. now we find ourselves in a very profitable position to place a short since we have some divergence that started at the completion of the pattern. and we are in a position where our risk to reward ratio is ideal at a more than 1:1.5. all analysis were made with the completion of the pattern, this higher high just being noise afterward and still remaining in our trading zone. this trade has all the potential to be a great entry with structure having being met and respected as a level, divergence, signaling that the market was overbought at the completion of the pattern and reached overbought conditions ever since. targets go at a of the pattern and 61.8%. i put my stops at 127% of C to D leg.
Comment: market opened with a huge gap in favor of the pattern
Trade active: rarget 1 has just been reached.
Trade closed: target reached: both target were hit.
Comment: power of harmoncs once again. 5/1
thank you! glad you liked it. i wasnt aware of that as i do purely technicals but that does sound interesting seeing i have shorts on usdcad weekly chart if you look at my previous analisis and i also have this short on crude, both to the same harmonic pattern so itll be interesting to see how those patterns play out. also what support line are you talking about on the usdcad? what time frame? show me. id like to take a look.
we can almost always look for pullbacks after the 38.2% and then after that for the market to go back to bear because patterns are so powerful that they exhaust the market on their way to their target so once the 38.2% gets reached you should expect pullbacks. as you can see that pullback is happening now. to be honest I don't really look at time when I am making my analisis. I don't really worry about if the market will take 1 day or 5 days to reach my second target. I just look for breaks. once the market breaks the bullish correction channel then I know we can look for the market to continue bear