Cypher Pattern Verses the Shark PatternDDOG appears to be trading in a bullish shark pattern and D is the target. It is labeled O, X, A, B, C verses X, A, B, C, D like other harmonic patterns. I am not sure why the Shark is labeled differently than the other harmonic patterns, but maybe to differentiate it from the Cypher pattern as they are similar.
As with other harmonic patterns, the Shark pattern exhibits Fibonacci relationships within its structure. Shark pattern is a five point formation with four primary legs. The shark is often confused with the Cypher pattern as both have a second peak that is above the first peak. In theory, the Cypher's final leg (CD) pulls back only to the 0.786 of XA (1st leg). The Cyper is labeled XABCD verses OXABC like the shark (confusing) The final leg(BC) of a shark pulls back to the .886 or to the 1.13 fib level of OX (1st leg).
The cypher, in theory, can only have it's AB leg (2nd leg) retrace 38 to 61% of it's first leg (impulse leg). The shark pattern has no designated area of retracement (that I know of) by the 2nd leg except it can not go deeper than point O.
The second leg is where you can start eliminaing other harmonic patterns. The third leg is where you can eliminate even more. IE, if the 3rd leg's peak is lower than the first peak in the pattern, you are not looking at a cypher pattern or a shark pattern. This is for bullish harmonic patterns only as there are also bearish versions of these patterns. It seems possible that in some cases (not all), the shark and the cypher could really not be totally differentiated until the Potential Reversal Zone is reached (PRZ). In this particular chart, the 2nd leg pulled back too far to be a cypher pattern.
The hyperextended moves of a shark pattern causes price exhaustion. The supply and demand is interrupted due to the rather extreme price moves, which can trigger a strong reaction when the price reaches the potential reversal zone, especially if that level corresponds with a previously established support level for the bullish shark pattern.
Possible stop below last pivot low.
No recommendation