Technical Indicators are ready made analysis. However they should not be a sole reason to initiate a buy or sell in a stock. Technical indicators should be used along with other analysis to take up the decision.
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Hi,
This will be the brief and appropriate answer for Fibonacci retracement to identify support and resistance zone?
Fibonacci Retracements are ratios used to identify potential reversal levels. These ratios are found in the Fibonacci sequence. The most popular Fibonacci Retracements ratios are
1. 61.8% – dividing one number in the series by the number that follows it. For example: 8/13 = 0.6153
2. 38.2% – ratio is found by dividing one number in the series by the number that is found two places to the right.
3. 23.6% ratio is found by dividing one number in the series by the number that is three places to the right.
To identify support and resistance zones:
For bullish trend Draw Horizontal lines with the bottom & top & considered to be 0% & 100% respectively. if the price goes above 23.6% then there is support the resistance zones can be 38.2% & 61.8% likewise resistance zone is considered.
Thanks vignesh sir, now those numbers makes sense to me.