A Fibonacci technical analysis is an exercise which is extremely handy for stock traders and those involved in daily stock analysis. It is based on the theory that naturally occurring special ratios can be used to predict or foretell points or levels of resistance and support for stock markets and currency markets which are also believed to be creations of nature [that is, of humans].
It is a complex schema of calculating predictions in the stock market which requires a great deal of expertise and understanding. Care should be taken to ensure that the Fibonacci reports are made by one well versed in the art, and that there are no errors. The report must tabulate the findings along with the graphs on which the findings will be based.
Sample Fibonacci Technical Analysis
Fibonacci technical analysis created by: JH traders Pvt. Ltd.
Fibonacci technical analysis created for client: Joseph McClellan and Associates Pvt. Ltd.
Date of submission of Fibonacci technical analysis: 12th June 2012
Purpose of Fibonacci Technical Analysis:
- To determine Fibonacci retracement levels
- To determine the ration of the Fibonacci sequence
- To calculate S&P 500 Depository Recepits
- To determine the validity of applying the Fibonacci sequence to stocks, commodities and forex currency pairs.
Please check the attached document [graph chart] containing the Fibonacci retracement levels for individual stocks of our firm for the time period of March 2012 to April 2012. Findings are based on the graph provided.
- LEVELACTING AS RESISTANCE: 25%
- LEVEL ACTING AS SUPPORT: 38.2%
- PRICES RESOLVED TO 25.6% RETRACEMENT LEVEL AND THEN DOWNTURNED TO 14.5%