4.90 to 5.60 was a 70-cent A to B leg.
1.272 times 70 cents = 89 cents.
5.20 plus 89 cents = 6.09.
Actual high 6.11; 2 cents off.
Tested the May 21st 6.10 high which had 832k with lighter volume, 441K.
Printed a long-tailed doji....stopping action......should retrace.
38.2% retracement of 4.90 to 6.11 = $5.65.
61.8% retracement of 5.20 to 6.11 = 5.55.
Look for light volume retracement to buy.
I'm usually the first to criticize this technical 'mumbo jumbo'....I think it is the names ("...well if it is a Doji, it must be true!"). However, I must say today's quick plummet...dare I call it a 61.8% retracement???....makes me think that OP's take has plenty of merit.
Thanks for your vote of confidence tddhrris. Something I did not mention was that not only was the CD leg a 1.272 extension of the AB leg....but also....the $6.11 high was a 127.2 % retracement of the move from July 29th of 5.85 to Aug 6th of 4.90. So picture it.......It gets to a high of 5.85 (point X) and comes down to 4.90 (point A) then it does an AB=1.272CD putting it over the 5.85 and into 6.11 (Point D). Point D is a 127.2% retracement of the X to A move. That was a textbook butterfly sell pattern...you can look it up.
I did not take the SKUL trade....I had bigger fish to fry....made 423% on a S&P futures option trade today.
Okay, so SKUL got under the fib confluence I mentioned earlier; 5.55 to 5.65. It held the 20 DMA and the 61.8% retracement between the A and D points previously mentioned. The last place it had volume was May 3rd which had a high of 5.34. Today's low was 5.36. It also had volume on May 1st with a high of 5.13 and low of 4.80. So those sticks should offer support. If it gets deep into the sticks then it'll probably go for the bottom of the sticks, so 4.80 is possible IF it comes down further with heavy volume. I think it will definitely go down at least another 2 pennies to get into that 5.34. Need to see what it does from here. The next Fib level down is the 78.6% retracement of A-D which is at $5.16. The good news is that it is going against Aug 23rd which had 415k vs 392 today and it held the low price of that stick.
Bottom line is that there is no trade here....the market needs to release more information. If you're long though you rather it to go sideways for awhile to work off the over-bought condition on the daily chart.