Fibonacci Number and Ratio Analysis
Fibonacci downside channel expansions may be formed in a number of ways.
The conventional approach of constructing the main channel is by connecting the
peaks and projecting a channel line from a lower trough. See Figure 10.69.
An alternative approach of constructing the main channel is to connect the
troughs and projecting a channel line from a higher peak. See Figure 10.70.
A less conventional way of constructing Fibonacci downside channel expan-
sion is by connecting a lower trough with a higher peak, and projecting the channel
line from a trough preceding that higher peak, as illustrated in Figure 10.71.
In Figure 10.72, we see Fibonacci channel expansions on the daily Gold chart,
based on the width of the original channel, as indicated. The chart also displays
two standard Fibonacci downside projections, projecting the range AB downward
from point C. Price is seen testing the 61.8 percent, 100 percent, 161.8 percent,
300 percent, and 361.8 percent Fibonacci channel lines very decisively. The vari-
ous Fibonacci downside projection levels also provided added bullishness at the
100 percent and 361.8 percent channel line expansions.Figure 10.69 Conventional Fibonacci Downside Channel Expansions.Figure 10.70 Conventional Fibonacci Downside Channel Expansions.