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 this on price charts to guess where a pullback might stop before the original trend resumes. For example, if TechCorp stock jumped from $100 to $150, traders might watch the 61.8% retracement level ($69.50) as a potential bounce point. It's not foolproof—just one tool among many that technical analysts use to time entries and exits.