Just an Experiment9-2-20 Experiment ZS gapped up on earnings and barely looked back. Does the CD leg = 50? not yet
I am trying to pinpont the pattern ZS is trading in.
AB=CD is a reversal pattern that helps you identify when the price is about to change direction. There is a bullish version at the bottom and a bearish version at the top. I think ZS is the bearish version at the top
The length of line AB should be equal to the length of line CD.
The time it takes for the price to go from A to B should be equal to the time it takes for the price to move from C to D.
For both the bullish and bearish versions of the ABCD chart pattern, the lines AB and CD are known as the legs while BC is called the correction or retracement. (Plain old ABC bullish is easier..lol)
AB=CD at the top is considered a bearish pattern? I would not consider it bearish had a gotten in at A or at C. lol But these patterns are usually destined to topple down at D, so I guess that is why it is considered bearish. I did get in before A right before earnings, but sold this way too soon. Oh well..it happens (Knocking it off my shoulder like a flea..lol) not really because I missed a lot of money by not staying in longer. Made my target and sold. Why do I still look at it from time to time???? Maybe we all do this just to torutre ourselves...dunno (o:
There is also an ABCD Extension pattern and the CD would have to surpass the AB leg. I am curious to see which one it is or if it is either one. There is no way to know if it is the ABCD Extension pattern unless it surpasses the length of the AB leg which would be 166ish, CD is the 127.2%-161.8% extension of AB. CD can be even 2 times (or more) longer than AB.
I am learning this pattern so curious to see what happens next and if ZS makes it to 166ish, and if it can make it higher than 166ish. Then descern is it is AB=CD or the ABCD extension pattern..or if it is neither. It did not make it today. I wrote this BMO But tomorrow is another day!
Overbought so I know I am not buying this again way up here in the sky
I am just learning so do not take this as advice. I owned ZS but sold it at end of AB leg. I guess at that point there was no way to know the pattern. I could not figure out the pattern and then it hit me. I am testing to see if this is indeed the pattern. Short interest is high but that is to be expected with such a long move up and a gap below price.
Just an experiment. If anyone is familiar with these patterns..please comment
