Fibonacci Retracement

Fibonacci Retracement is a charting tool that predicts where a stock price might find support or resistance after it's moved sharply in one direction. It uses a mathematical sequence (1, 1, 2, 3, 5, 8, 13...) to calculate percentage levels—typically 23.6%, 38.2%, 50%, 61.8%, and 78.6%—between a stock's recent high and low. You'll see traders use it to guess where a falling stock might bounce back up, or where a rising stock might pause. For example, if TechCorp rallied from $100 to $200, traders might watch the 61.8% retracement level ($61.80 down from the peak) as a potential buying opportunity. It's popular because it's simple to apply, though remember: no tool predicts the future perfectly.