Fibonacci retracement levelsStock trading tool integrated into stock analysis softwareFibonacci retracement levels are one of the best stock market trading tools. It is also integrated in Amibroker stock analysis software. Although it looks very simple and easy it is very powerful stock market trading tool. Fibonacci retracements are used by traders on stock markets, on commodities markets and Forex markets too. It helps to analyze strength of stock market trend and also to set up possible
stop loss levels
or
target levels
for trades. Examples: This first chart shows situation in GEF stock. After strong uptrend move in second half of 2007, stock consolidate in upper part of whole price move. Using Fibonacci retracement stock trading tool available in Amibroker stock analysis software you can see that stock was not able to move lower then about 38-40% of last uptrend move . It signalizes strong interest of buyers and no interest in selling of this stock. It looks that investors are not willing to sell this stock . Instead every pullback to first important retracement level is used as buying opportunity. Resolution: This is strong stock and is worth of buying.
As the chart does not offer another hint for target of the trade (like some old resistance level), you can use extensions of Fibonacci retracement stock market trading tool. 130% or 150% level could be seen as possible targets for long trade.
Stock market trading tipCombine Fibonacci retracement levels with another type of support and resistance. More types in one price area, stronger type of level it is.
Return from fibonacci retracement to stock chart analysis
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