How do we use Fibonacci retracement to identify support and resistance zone?

[sivaranjani]

Fibonacci Retracements are ratios used to identify potential reversal levels. These ratios are found in the Fibonacci sequence. The most popular Fibonacci Retracements are 61.8% and 38.2%. Note that 38.2% is often rounded to 38% and 61.8 is rounded to 62%.These retracements can be combined with other indicators and pricepatterns to create an overall stratergy.

[Divya]

A Fibonacci retracement is a term used in  technical analysis that refers to areas of support or resistance . Fibonacci retracement   levels use horizontal lines to indicate areas of support or resistance at the key Fibonacci levels before the trend continues in the original direction. These levels are created by drawing a trendline between the high and low and then dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%.

[Anitha Ramesh]

Fibonacci retracement helps us to identify potential reversal of trend.

Create a chart with trendline  at 100%,61.8%,50%,38.2%,23.6%,0%

start with high at 100% trendline. If the stock touches 61.8% ,it is the time to look for reversal.Once it reverses,it has resistance  at 100%.

If it does not reverse,look for support at 38.2%.

Thus the support and resistance zone are identified.

[Amith Nandakumar]

It is used for potential trend reversal. The ratios are found using fibonacci sequence.

A horizontal line as 38% is used as support and 62% is used as resistance.

[Guru]

<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>Fibonacci retracement helps us to identify potential reversal of trend.</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>Create a chart with trendline  at 100%,61.8%,50%,38.2%,23.6%,0%</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>start with high at 100% trendline. If the stock touches 61.8% ,it is the time to look for reversal.Once it reverses,it has resistance  at 100%.</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>If it does not reverse,look for support at 38.2%.</p>
<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>Thus the support and resistance zone are identified.</p>

[Author]

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