Forbes contributing writer Tom Aspray discussed the use of Fibonacci retracement levels a few days ago.
Yes, the same Fibonacci numbers that provide the basis for Elliott Wave technical analysis.
The 20 day is around 1331 and the 25% Fibonacci retracement stands at 1320.
The Fibonacci retracement levels can be used to determine both entry and exit levels.
Typically, Elliott Wave analysts do some Fibonacci Ratio computations to help answer this question.
To determine the profit taking levels I use a combination of Fibonacci and chart analysis.
The 38.2% Fibonacci retracement support is at 532.80, with the 50% support level at 520.60.
The next chart shows how we can establish Fibonacci relationships between the corrective waves from the top.
The major 38.2% Fibonacci retracement resistance has been overcome, with the 50% resistance now at 581.
Google searches uncovered that a mathematical concept called the Fibonacci number sequence underlies the structure of tree branches.
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The Dax has reached the September 2012 highs, with the 38.2% Fibonacci retracement support to follow at 7, 246.
There is further support at the August low of 7, 940, and the 50% Fibonacci support follows at 7, 866.
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Frequently, such corrections recover to a Fibonacci ratio of the prior move, and 50% is one such ratio.
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The PowerShares QQQ Trust ( QQQ) violated its daily uptrend and the 50% Fibonacci retracement support last week.
On an upside breakout the 127.2% Fibonacci target is at 2355 with the upper trend line at 2365.
The rebound from this low briefly overcame the 61.8% Fibonacci retracement resistance in the middle of September.
It is a good example of why Fibonacci retracement analysis can be used a good risk management tool.
This correction held above the 61.8% Fibonacci retracement support level, which was point 2 of the double-bottom formation.
One technical analyst thinks the sweetener will rise 10% in the coming months based on a Fibonacci retracement.
Using the decline from the August 9 high to the August 15 low, there are some interesting Fibonacci targets.
The 127.2% Fibonacci retracement target is at 8, 631, which also coincides nicely with the upper parallel trading channel.
The next key support is at 8, 022, which is the 38.2% Fibonacci support.
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The truckers violated the 61.8% Fibonacci retracement support from the 2009 lows in July, which is a negative sign.
The November correction stopped in between the 38.2% and 50% Fibonacci support levels.
The 50% Fibonacci retracement support from the 201 lows has been reached.
Wave analysts often use Fibonacci ratios to compute possible end points for waves.
Of course, it is also possible to use Fibonacci analysis on the chart formation to determine other potential targets.
Also, interesting to note, the October sell-off stalled at the 61.8% Fibonacci retracement support level, seen on Figure 1 below.
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The upper boundary of the flag formation, line d, is at 2664 with the 61.8% Fibonacci retracement resistance at 2678.
The Dow also held its 61.8% Fibonacci Retracement of the rally from the 1987 low and the October 2007 high.
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