the hAnDbook oF teChnICAl AnAlysIsThe 50 percent upside retracement level is:=+ ×
=+ ×
=Trough Price Range Retracement Ratio
B Price Range 0 5( )
(. )
$448 30 0 5
63
+×
=
($. )
$
The 61.8 percent upside retracement level is:=+ ×
=+ ×
Trough Price Range Retracement Ratio
B Price Range 0 618( )
(. )
==+×
=
$ ($. )
$.
48 30 0 618
66 54
10.4.3 Calculating potential support via Fibonacci
Downside retracement Levels
Assume that the significant trough and peak of an observed retracement range
are point A and point B, respectively. Assume that the trough at point A is at the
price level of $59 and that the peak at point B is at $99. Refer to Figure 10.16 as
a visualization guide.
The formula for calculating downside retracement levels within a given price
range is:
Peak - (Price Range × Retracement Ratio)In our example, the observed the price range AB is:Price Range Peak Trough
B A
99 59
40=−
=−
=−
=
$ $
$
(Note: We always subtract the trough from the peak, regardless of whether
it is for a downside or upside retracement calculation, as the price range must
always be a positive value.)
The 23.6 percent downside retracement level is:=− ×
=− ×
=Peak Price Range Retracement Ratio
B Price Range 0 236