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Butterfly pattern

A harmonic pattern where B retraces 0.786 of XA and D extends to 1.27 of XA, beyond X.

Why it matters

Because D makes a new extreme past X, it is a reversal at the end of a move, not a pullback.

How to read it

Zone near 1.27 of XA, stop limit 1.414. Counter trend by nature, so it needs a clear reaction before it means anything.

Related

Harmonic patternsPrice swings whose lengths match Fibonacci ratios, grouped into named shapes like the Bat and the Crab.Crab patternA harmonic pattern whose D stretches to 1.618 of XA, the most extreme of the set.

In the Cluenex app, this explanation opens next to every butterfly pattern figure, with the live reading for the stock you are looking at. Open it in Cluenex