this section is about technical analysis moving avg and rsi and also has Fibonacci series.
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@vignesh-k I try to answer to your questions.
Fibonacci sequence is named after Leonardo Pisano Bogollo (1170-1250), and he lived in Italy. The Fibonacci sequence is the series of numbers: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34 …………..
The next number is found by adding up the two numbers before it. In Mathematics and in arts, ratio is considered Golden, if ratio of the sum of two quantities to the larger quantity is equal to the ratio of the larger quantity to the smaller quantity. There are two quantities say A and B, where A is larger than B. If (A+B)/A= A/B then answer is Golden Ratio which is 1.6180339887…
This Golden ratio is observed, if you take ratio of any two successive Fibonacci numbers. It comes very close to 1.618034.
This Golden ratio appears frequently in stock market, basically near to levels where wave tops and bottoms are being made. Therefore Golden ratio helps in identifying key turning points of the waves and thus helps in predicting the price trend.
To identify support and resistance zone:
It’s based on the numbers identified in Fibonacci sequence to define area of support and resistance. It is created by taking two extreme points (usually a major peak and trough) on a price chart and then dividing the vertical distance by key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%. Once these levels are identified, horizontal lines are drawn to indicate areas of support or resistance at the key Fibonacci levels before prices continue to move in the original direction.