The Bullish Butterfly Harmonic Pattern is a technical analysis pattern used in trading, particularly in the context of financial markets such as the US100, which represents the Nasdaq 100 index. This pattern is based on the principles of Fibonacci retracement and extension levels and is considered a potential reversal pattern. In the given context, let's explore the key features of the Bullish Butterfly Harmonic Pattern using the provided price levels for the US100 index:
X to A Leg:
The X point is the starting point of the pattern. In this case, the X price is 14,240.
The A point is the first significant price move. Here, the A price is 15,935.
A to B Leg:
The B point is a retracement from point A. The B price is 14,521. This implies that there has been a decline from the A point.
B to C Leg:
The C point is where the price starts to rally from the B point. In this case, the C price is 15,654. This marks a bullish move from the B point.
C to D Leg:
The D point represents the potential reversal point and completion of the pattern. The D price is 13,200, which is lower than point X. This is a critical aspect of the Bullish Butterfly pattern, where price makes a lower low.
The Bullish Butterfly Harmonic Pattern is defined by specific Fibonacci ratios between these points:
The A to B leg typically retraces about 0.786 (78.6%) of the X to A leg.
The C point is often at around 0.382 (38.2%) retracement of the X to A leg.
In this pattern, the distance between the A and D points should be approximately 1.618 (161.8%) extension of the A to B leg, indicating that the D point should be significantly lower than the X point.
The completion of the Bullish Butterfly Harmonic Pattern suggests a potential reversal to the upside. However, it's important to note that the price movement from the D point may not be immediate, and traders often use additional technical and fundamental analysis to confirm the pattern.
As for the long-term prediction you mentioned, from the D point at 13,200 to 17,200, this would represent a significant bullish move. However, it's crucial to consider that financial markets are influenced by various factors, including economic conditions, geopolitical events, and market sentiment. Therefore, it's advisable to use this pattern as a part of a comprehensive trading strategy and not rely solely on it for long-term predictions. Always perform thorough analysis and risk management when trading or investing.
X to A Leg:
The X point is the starting point of the pattern. In this case, the X price is 14,240.
The A point is the first significant price move. Here, the A price is 15,935.
A to B Leg:
The B point is a retracement from point A. The B price is 14,521. This implies that there has been a decline from the A point.
B to C Leg:
The C point is where the price starts to rally from the B point. In this case, the C price is 15,654. This marks a bullish move from the B point.
C to D Leg:
The D point represents the potential reversal point and completion of the pattern. The D price is 13,200, which is lower than point X. This is a critical aspect of the Bullish Butterfly pattern, where price makes a lower low.
The Bullish Butterfly Harmonic Pattern is defined by specific Fibonacci ratios between these points:
The A to B leg typically retraces about 0.786 (78.6%) of the X to A leg.
The C point is often at around 0.382 (38.2%) retracement of the X to A leg.
In this pattern, the distance between the A and D points should be approximately 1.618 (161.8%) extension of the A to B leg, indicating that the D point should be significantly lower than the X point.
The completion of the Bullish Butterfly Harmonic Pattern suggests a potential reversal to the upside. However, it's important to note that the price movement from the D point may not be immediate, and traders often use additional technical and fundamental analysis to confirm the pattern.
As for the long-term prediction you mentioned, from the D point at 13,200 to 17,200, this would represent a significant bullish move. However, it's crucial to consider that financial markets are influenced by various factors, including economic conditions, geopolitical events, and market sentiment. Therefore, it's advisable to use this pattern as a part of a comprehensive trading strategy and not rely solely on it for long-term predictions. Always perform thorough analysis and risk management when trading or investing.