Fibonacci Fan

Description

Fibonacci Fan Lines are displayed by drawing a trend line between two extreme points. Then an "invisible" vertical line, equal to the vertical distance between the extreme points, is drawn from the second extreme point to the level of the first extreme point. Four trend lines are then drawn from the first extreme point so they pass through the invisible vertical line at the Fibonacci levels of 23.6%, 38.2%, 50.0%, and 61.8%.

Chart 1: Fibonacci Fan

Anticipate support / resistance as price approaches Fibonacci Fan Lines.

Chart 2: Fibonacci Fan

Rising Fibonacci Fan

  • Fan line 1: Drawn from extreme low through 23.6% retracement level on “invisible” vertical line
  • Fan line 2: Drawn from extreme low through 38.2% retracement level on “invisible” vertical line
  • Fan line 3: Drawn from extreme low through 50% retracement level on “invisible” vertical line
  • Fan line 4: Drawn from extreme low through 61.8% retracement level on “invisible” line

Falling Fibonacci Fan

  • Fan line 1: Drawn from extreme high through 23.6% retracement level on “invisible” vertical line
  • Fan line 2: Drawn from extreme high through 38.2% retracement level on “invisible” vertical line
  • Fan line 3: Drawn from extreme high through 50% low retracement level on “invisible” vertical line
  • Fan line 4: Drawn from extreme high through 61.8% retracement level on “invisible” vertical line

Technical analysis focuses on market action — specifically, volume and price. Technical analysis is only one approach to analyzing stocks. When considering which stocks to buy or sell, you should use the approach that you're most comfortable with. As with all your investments, you must make your own determination as to whether an investment in any particular security or securities is right for you based on your investment objectives, risk tolerance, and financial situation. Past performance is no guarantee of future results.

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