Fibonacci Number and Ratio Analysis
In our example, the observed the price range AB is:Price Range Peak Trough
B A0
=−
=−
=−
=
$ $
$
236 186
5
(Note: We always subtract the trough from the peak, regardless of whether it
is for a downside or upside extension calculation, as the price range must always
be a positive value.)
The 127.2 percent downside extension level is:=− ×
=− ×
=Peak Price Range Extension Ratio
B Price Range 1 272
23( )
(. )
$ 66 50 1 272
172 4
−×
=
($. )
$.
The 161.8 percent downside extension level is:=− ×
=− ×
=Peak Price Range Extension Ratio
B Price Range 1 618
23( )
(. )
$ 66 50 1 618
155 1
−×
=
($. )
$.
The 261.8 percent downside extension level is:=− ×
=− ×
=Peak Price Range Extension Ratio
B Price Range 2 618
23( )
(. )
$ 66 50 2 618
105 1
−×
=
($. )
$.
10.6 Fibonacci (Φ‐Based) Percentage Expansion Levels beyond an Observed Price Range
Fibonacci expansions are also employed to forecast potential support and resistance.
Popular Fibonacci price percentage expansions levels include:■ (^) 127.2 percent
■ (^) 161.8 percent
■ (^) 261.8 percent
■ (^) 361.8 percent
■ (^) 423.6 percent
■ (^) 461.8 percent