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Hopefully, you have understood the implications of fibonacci retracement levels. Let me show you some examples and how fibonacci works magically.
Let me do a live case study with the Indian IT major, Infosys.
This is the yearly chart of Infosys. You can see that the High it has made is 2990 and the
Low is 2101.
Now let us calculate the Fibonacci Retracement levels.
High - Low = Range
i.e., 2990 - 2101 = 889
Now the 0.236 retracement = 2101 + (889*0.236) = 2310.8
0.382 retracement = 2101 + (889*0.382) = 2440.6
0.618 retracement = 2101 + (889*0.618) = 2650.4
If you observe, at these points have acted as major supports when the stock fell down. Now though it is below the retracement levels 2310 is an important support, and if it breaks Infosys stock may again correct upto 2100-2200.
I hope this has helped you to understand the concept of retracement levels. If you need to understand more, contact me on my email id nsebsestocktradingcalls@gmail.com
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